Which of the Following Are Primary Concerns of a Bank

question 75

Multiple Choice

Which of the following are primary concerns of a bank manager?

• A)maintaining sufficient reserves to minimize the cost to the bank of deposit outflows
• B)extending loans to borrowers who will pay high interest rates, but who are also good credit risks
• C)acquiring funds at a relatively low cost, so that profitable lending opportunities can be realized
• D)all of the above

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Definitions:

Machine-Hours

A metric for the amount of time a machine is operational, typically used in manufacturing processes.

Fixed Costs

Costs that do not vary with the level of production or sales over a short period, such as rent, salaries, and insurance.

Estimated Activity

The projected level of activity used to allocate overhead costs, often based on metrics such as machine hours or labor hours.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead to products based on a relevant activity base.