Which of the Following Is Not an Advantage of Using

question 115

Multiple Choice

Which of the following is not an advantage of using a repurchase agreement?

• A)The bank gains excess reserves which can be used to make new deposits.
• B)The bank makes use of high-quality but low yielding assets without losing them permanently.
• C)If the agreement is made with a bank which keeps a checkable deposit with another bank,it can reduce both the bank's deposits and reserve requirements.
• D)The interest rate the bank has to pay is usually low.
• E)All of the options are advantages of using a repurchase agreement.

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Definitions:

Cashier Check

A check drawn by a bank on its own funds and signed by a cashier, considered more reliable than a personal check because the bank guarantees its payment.

Commission Salesman

An individual who earns income based on the percentage of sales they generate.

Bargaining Position

The relative power of a party during negotiations that can influence the terms of the agreement.

Model Year Cars

Refers to the specific year's version of a car model, typically signifying technological updates or design changes.