The Table Below Shows Data (In Millions)for Sun Trust Banks

question 439

Multiple Choice

The table below shows data (in millions) for Sun Trust Banks in September 2007 and September 2008.

The data show that Sun Trust

• A) increased its reserve ratio to 5.3 percent over the 12 months.
• B) increased its reserve ratio to 6.4 percent over the 12 months.
• C) has fewer excess reserves in 2008.
• D) faced a higher currency drain ratio in 2008.

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Definitions:

Financial Risk

The possibility of losing money on an investment or business venture due to various factors including market fluctuations, interest rate changes, and credit risk.

Efficient Market Theory

A hypothesis stating that financial markets fully incorporate all available information into asset prices at all times.

Interest Rate

The annual percentage rate applied to the outstanding amount of a loan, representing the charge borrowers pay for interest.

Fundamental Value

The intrinsic worth of an asset, determined by its cash flows, dividends, and growth prospects, rather than current market conditions.