The Designated Reserve Ratio Is a Rule That Stipulates That

question 74

True/False

The Designated Reserve Ratio is a rule that stipulates that highly-rated DIs would not pay deposit insurance premiums if this ratio was above 0.25 percent.

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Definitions:

Cash Cycle

The time it takes for a company to convert its investments in inventory back into cash, encompassing the entire sales and payments process.

Factoring Receivables

The financial transaction where a business sells its accounts receivable (invoices) to a third party (factor) at a discount to obtain immediate cash.

Blanket Inventory Lien

A secured interest over all of the inventory of a borrower, granting the lender the right to seize inventory in the event of non-payment.

Committed Line Of Credit

A credit facility where the bank agrees to lend a specified amount of money to the company over a certain period of time.