Which of the Following Does Not Constrain Banks' Lending Activities

question 2

Multiple Choice

Which of the following does not constrain banks' lending activities

• A) Customer demand for loans
• B) Profitability of potential loans
• C) Customer repayment of loans
• D) Monetary policy

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Definitions:

Annual Cash Flows

The total amount of money being transferred into and out of a business, measured on a yearly basis.

Initial Cash Outflow

The initial expenditure involved in a project or investment, often referring to the sum of money paid at the start.

Required Return

The minimum profit or yield that an investor aims for when investing in a financial instrument or project.

Payback Period

The duration required to recover the cost of an investment, calculated by dividing the initial investment by the annual cash inflow.