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Which of the Following Allow Banks to Minimize the Cost

question 341

Multiple Choice

Which of the following allow banks to minimize the cost to a business of borrowing?
I. Borrowing long and lending short
II. Raising funds from a large number of depositors
III. Creating money by lending all their reserves


Definitions:

Treasury Stock

Represents the shares that have been issued and subsequently reacquired by the corporation, not yet retired.

Par Common Stock

The face value of a share of stock as stated in the corporate charter.

Cost Method

An accounting method used to value inventory or investments at their original purchase cost.

Treasury Stock

Shares initially offered by a company and then purchased again by that company, lowering the volume of shares that are actively traded on the market.

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