Which of the Following Is Not an Advantage of Larger

question 11

Multiple Choice

Which of the following is not an advantage of larger cash balances for a bank?

• A) Larger cash balances reduce the need to borrow at the discount window.
• B) Larger cash balances reduce the risk of bank runs.
• C) Larger cash balances reduce the risk of paying penalties to the Federal Reserve.
• D) Larger cash balances increase reserve balances.
• E) Larger cash balances reduce a bank's interest expense.