A Bank Manager Who Wants to Increase Profitability Would Likely

question 192

Multiple Choice

A bank manager who wants to increase profitability would likely

• A)hold more of the bank's assets in required reserves
• B)hold more of the bank's assets in excess reserves
• C)reduce the liquidity of a bank's assets
• D)meet all depositors' requests for funds with little trouble
• E)hold more of the bank's assets in deposits at the Federal Reserve System

---

Definitions:

Monthly Rate

Typically refers to an interest or finance charge applied on a monthly basis to loans, mortgages, or credits.

Discount Rate

The interest rate that the Federal Reserve charges commercial banks for loans, influencing the money supply and overall economic growth.

Perpetuity

A financial instrument or investment that pays a fixed amount of money indefinitely without a maturity date.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, usually with fixed dividends.