Banks Can Resolve a Liquidity Problem by

question 21

Multiple Choice

Banks can resolve a liquidity problem by

• A)extending new loans.
• B)selling assets.
• C)buying back common stock.
• D)increasing dividend payouts.
• E)extending new loans AND selling assets.

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Definitions:

Parallel Circuit

A type of electrical circuit in which the components are connected alongside each other, forming branches such that each component has the same voltage.

Resistor Voltage

The voltage drop across a resistor, determined by the current flowing through it and its resistance, according to Ohm's Law.

Power Factor

A measure of how effectively electrical power is converted into useful work output, with a value ranging from 0 to 1, where 1 indicates maximum efficiency.

Parallel Circuit

An electrical circuit in which components are connected in parallel, resulting in the same voltage across each component but possibly different currents through each.