If a Bank's Management Uses "The Discipline of the Financial

question 28

Multiple Choice

If a bank's management uses "the discipline of the financial marketplace" to gauge its liquidity position,one of the indicators of this market test of adequacy of a bank's liquidity position is:

• A)the bank's return on equity capital.
• B)the volume of bank stock outstanding.
• C)the bank's return on assets.
• D)the size of risk premiums on CDs the bank issues.
• E)None of the options is correct.

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Definitions:

Health Care

The maintenance or improvement of health via the prevention, diagnosis, treatment, recovery, or cure of disease, illness, injury, and other physical or mental impairments in people.

Labor-intensive Business

A business that requires a high level of manual labor input compared to capital investment, typically characterized by a significant proportion of operational costs being attributed to human labor.

Capital-intensive Business

A type of business that requires significant investment in capital assets like machinery and equipment, often associated with manufacturing industries.

Service-intensive Business

A type of enterprise that primarily offers services rather than goods, requiring a high level of customer interaction and support.