Why Might a Bank Choose to Hold Secondary Reserves,such as Canadian

question 30

Multiple Choice

Why might a bank choose to hold secondary reserves,such as Canadian Treasury bills?

• A)They pay lower interest rates than deposits at the Bank of Canada and are hard to convert into cash assets.
• B)They pay higher interest rates than deposits at the Bank of Canada, even though they are hard to convert into assets.
• C)They pay lower interest rates than deposits at the Bank of Canada, but are more easily converted into cash assets.
• D)They pay higher interest rates than deposits at the Bank of Canada and are easily converted into cash assets.

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