Banks Hold Excess and Secondary Reserves to

question 59

Multiple Choice

Banks hold excess and secondary reserves to

• A) reduce the interest-rate risk problem.
• B) provide for deposit outflows.
• C) satisfy margin requirements.
• D) achieve higher earnings than they can with loans.

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Definitions:

Organization's Cost Performance

The measure of how efficiently an organization controls its expenses in relation to its revenues or operational activities.

Job Order Cost Accounting

A system used to calculate the costs associated with a specific job or order, tracking direct labor, direct materials, and overhead.

Service Business

A type of business that provides intangible products or services to its customers rather than selling physical goods.

Factory Overhead Rate

A calculation used in manufacturing to allocate indirect costs, such as utilities and rent, to individual units of production.