If a Bank Needs to Raise the Amount of Capital

question 29

Multiple Choice

If a bank needs to raise the amount of capital relative to assets,a bank manager might choose to

• A) buy back bank stock.
• B) pay higher dividends.
• C) shrink the size of the bank.
• D) sell securities the bank owns and put the funds into the reserve account.

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Definitions:

One-tailed

Describes a hypothesis test or statistical analysis where the significance is tested in only one direction, indicating the expected direction of an effect.

Directional

In hypothesis testing, directional refers to a hypothesis that specifies the direction of an expected difference or relationship (e.g., greater than, less than) between two groups or variables.

≠ Symbol

A mathematical symbol indicating that two values are not equal.

Two-tailed

A type of statistical test that is designed to consider both directions of effect or difference, allowing for the exploration of relationships in both positive and negative directions.