Secondary Reserves for Banks Are

question 8

Multiple Choice

Secondary reserves for banks are:

• A)The same as the bank's net worth
• B)Mainly the bank's liquid securities
• C)Vault cash
• D)Deposits the bank has at the Federal Reserve

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Definitions:

Cost of Debt

The effective rate that a company pays on its total debt.

Divisional Cost

The total expenses associated with operating a specific department or segment within a company.

Pure Play Approach

A business strategy in which a company focuses exclusively on one particular product or service to gain a competitive advantage.

Subjective Risk

The perceived level of risk based on an individual's personal judgment, as opposed to objectively measured risk.