If the Actual Reserve-Deposit Ratio Equals Eight Per Cent and the Desired

question 11

Multiple Choice

If the actual reserve-deposit ratio equals eight per cent and the desired reserve-deposit ratio for this bank is 10 per cent, the bank should:

• A)do nothing, because this is a profitable situation
• B)stop making loans
• C)send the extra reserves to the central bank
• D)request that customers withdraw deposits from the bank

Recognize the importance of an unconditional promise or order to pay in determining negotiability.

Understand the concept of negotiability in international trade finance instruments.

Recognize the legal implications of signatures and their forms on negotiable instruments.

Understand the concept of negotiability and the criteria that make an instrument negotiable.

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