A Bank's Reserves Include

question 16

Multiple Choice

A bank's reserves include:

• A)U.S.Treasury bills
• B)Currency in the bank but not currency in the ATM machines
• C)The bank's deposits at the Federal Reserve
• D)U.S.Treasury bills and currency in the bank

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Definitions:

Average Collection Period

A financial metric indicating the average number of days it takes for a company to receive payments owed by its customers.

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest obligations, calculated as earnings before interest and taxes divided by interest expense.

Times Interest Earned Ratio

A financial indicator assessing a company's capacity to pay its interest costs using its earnings before interest and taxes.

Year 2

Generally refers to the second year of operation, or the second year being considered in a multi-year analysis.