Which of the Following Statements Is an Accurate Description of Modern

question 28

Multiple Choice

Which of the following statements is an accurate description of modern liability management?

• A) Greater flexibility in liability management has allowed banks to increase the proportion of their assets held in loans.
• B) New financial instruments enable banks to acquire funds quickly.
• C) The introduction of negotiable CDs have significantly reduced the percentage of funds that banks borrow from one another to finance loans.
• D) All of the above have occurred since 1960.
• E) Only A and B of the above have occurred since 1960.

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Definitions:

Transferred Item

Goods that are moved from one process, department, or location to another within the same company.

Outside Supplier

A third-party entity that provides goods or services to a business.

Residual Income

Income that remains after all operating expenses, including cost of capital, are subtracted from revenue, often used in performance measurement.

Investment Center

A business segment whose manager has control over cost, revenue, and investments in operating assets.