Making More Frequent, but Smaller Cash Withdrawals from Banks ________

question 154

Multiple Choice

Making more frequent, but smaller cash withdrawals from banks ________ the inflation losses from holding cash and ________ the shoe leather costs of inflation.

• A)increases; increases
• B)increases; reduces
• C)reduces; has no impact on
• D)reduces; increases

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Definitions:

Expected Return

Expected return is the anticipated average return of an investment over a specified period, taking into account both expected gains and potential losses.

Required Return

The Required Return is the minimum expected return an investor anticipates on an investment to make it worthwhile, encompassing the risk-level associated with the investment.

Marginal Investor

An investor whose actions and choices at the margin are believed to determine the price of a stock.

Common Share

A type of equity security that represents ownership in a corporation and entitles the holder to vote at shareholders' meetings.