Bankers' Concerns Regarding the Optimal Mix of Excess Reserves,secondary Reserves,borrowings

question 25

Multiple Choice

Bankers' concerns regarding the optimal mix of excess reserves,secondary reserves,borrowings from the Fed,and borrowings from other banks to deal with deposit outflows is an example of

• A)liability management.
• B)liquidity management.
• C)managing interest rate risk.
• D)managing credit risk.

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Definitions:

Bondholders

Individuals or institutions that hold debt securities issued by governments or corporations, entitling them to receive fixed interest payments.

Carrying Amount

The book value of assets and liabilities that are reported on the balance sheet; it's determined by the original cost minus any depreciation, amortization, or impairment costs.

Straight-Line Amortization

Straight-line amortization is a method of gradually reducing the cost of an intangible asset over its useful life in equal installments.

Bond Interest Expense

The cost incurred by an issuer of bonds for paying interest to bondholders.