Which of the Following Practices Is Authorized by the Federal

question 6

Multiple Choice

Which of the following practices is authorized by the Federal Reserve Act?

• A) An agreement by a bank that it is responsible for the obligations of its subsidiary
• B) A bank's purchase, in its fiduciary capacity, of the affiliate's assets if the fiduciary instrument allows for such a purchase
• C) The sale of a nonaccruing loan from a bank to its bank affiliate
• D) The acceptance of an affiliate's securities of an affiliate as collateral for a NOTES bank's loan from the bank to the affiliate

---

Definitions:

Responsiveness

The ability of a system, organization, or individual to quickly react to changes, demands, or opportunities with effective actions.

Fixed Costs

A type of business expense that remains constant regardless of changes in production volume or sales, such as lease payments and utility bills.

Transportation Costs

Expenses associated with the movement of goods or materials from one location to another, including fuel, labor, and vehicle maintenance costs.

Flexibility

Flexibility in a business context refers to the ability to adapt quickly to changes in the market or operational conditions, maintaining efficiency and meeting customer demands.