Which of the Following Has Not Resulted from More Active

question 68

Multiple Choice

Which of the following has not resulted from more active liability management on the part of banks?

• A) Increased bank holdings of cash items
• B) Aggressive targeting of goals for asset growth by banks
• C) Increased use of negotiable CDs to raise funds
• D) An increased proportion of bank assets held in loans

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Definitions:

Borrowed Funds

Funds obtained through loans or credit, not from direct earnings or investments.

Leverage

The ability to finance an investment through borrowed funds, increasing both the potential for return and the level of risk.

Investment

The act of allocating resources, usually money, with the expectation of generating an income or profit, encompassing stocks, bonds, real estate, and other assets.

Principal

An amount of money borrowed from a lender.