The Sources and Uses of Funds Method of Estimating a Bank's

question 2

True/False

The sources and uses of funds method of estimating a bank's liquidity requirements divides the bank's liabilities into three categories-hot money,vulnerable funds,and stable funds-and estimates the probability of each being withdrawn from the bank.

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Definitions:

Net Income

The profit a company generates after all expenses, taxes, and costs have been deducted from total revenue.

Common Stock

Equity ownership in a corporation, with voting rights and potential dividends, but last in priority for assets and income.

Cash Dividends

Distributions of a corporation's earnings to shareholders as a return on their investment, typically in the form of cash.

Asset Balances

The values of all the assets that a company has listed on its balance sheet, these values are assessed at the end of a reporting period.