Demand Deposits Are Among the Most Volatile and Least Predictable

question 45

True/False

Demand deposits are among the most volatile and least predictable of a bank's sources of funds with the shortest potential maturity.

Comprehend the concept of required rate of return and its application.

Discern the assumptions underlying the net present value and internal rate of return methods.

Grasp the significance of cash flows, including timing and reinvestment, in project valuation.

Understand the treatment of depreciation and working capital in cash flow computations.

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Definitions:

Achieving Legitimacy

The process through which an organization seeks to be accepted or regarded as proper or valid within a certain context or by a specific audience.

Institutionalized

Refers to processes or norms that have been established and accepted within an organization or society as standard or proper.

Corporate Philanthropy

The act of corporations donating some of their profits, or their resources, to charitable causes.

Delay Gratification

The ability to resist the temptation for an immediate reward and wait for a later, often greater, reward.