A Bank with Fluctuating Deposit Liabilities in a Static Community

question 179

True/False

A bank with fluctuating deposit liabilities in a static community will tend to follow creative banking practices when approving loans.

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Definitions:

Loan

A sum of money borrowed from a lender that is expected to be paid back with interest.

Materially Altered

Refers to significant modifications made to a document or object that change its original condition or purpose.

Presentment Warranties

are assurances given by a party during the presentation of a negotiable instrument that certain facts are true.

Drawer

A drawer is the party that issues or writes a check or draft instructing the drawee, such as a bank, to pay a specified sum of money to a third party, the payee.