Which of the Following Statements Is Correct

question 104

Multiple Choice

Which of the following statements is correct?

• A) When borrowers repay bank loans, the money supply is increased
• B) When borrowers take out bank loans, the money supply is decreased
• C) A single bank can legally lend an amount equal to its total reserves
• D) A bank can only grant loans to customers if it has excess reserves

Know the benefits of Roth retirement plans.

Recognize good and bad general investment guidelines.

Understand the concept of risk management in personal investment planning.

Identify the roles and responsibilities outlined in the governance section of an IPS.

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Definitions:

Ratification

The act of formally approving an agreement or treaty, making it officially valid.

Principal

The party that an agent’s authority can bind or act on behalf of.

Agency

The fiduciary relationship that arises when one person consents to have another act on his behalf and subject to his control and the other consents to do so.

Power of Attorney

A legal document that grants one individual (the agent) the authority to act on behalf of another (the principal) in legal or financial matters.