Identify the INCORRECT Statement Regarding the Holding of Securities by Banks

question 57

Multiple Choice

Identify the INCORRECT statement regarding the holding of securities by banks.

• A)Bank's most liquid assets include cash, ES funds and interbank overnight deposits.
• B)Banks hold an inventory of shares for trading purposes.
• C)Banks earn income from their holdings of securities.
• D)The main liquid securities held are money market securities and bonds.
• E)All of these are correct.

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Definitions:

Variable Factory Overhead

Costs in manufacturing that vary with the level of production output, such as utilities and materials used in the production process.

Controllable Variance

The difference between actual budgeted costs and the controllable costs within a budget period.

Fixed Factory Overhead

Indirect manufacturing costs that remain relatively constant regardless of the level of production, such as rent, depreciation, and salaries of factory supervisors.

Volume Variance

The difference between the expected volume of sales or production and the actual volume, which can impact costs and profitability.