Which of the Following Is a Liability of a Bank

question 394

Multiple Choice

Which of the following is a liability of a bank and an asset of its customers?

• A)deposits of its customers and loans to it customers
• B)deposits of its customers but not loans to its customers
• C)loans of its customers but not the deposits of its customers
• D)neither the deposits of its customers nor the loans to its customers

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Definitions:

Complete Portfolio

A portfolio that includes both risky assets and a risk-free asset, optimizing the balance between risk and return.

Proportions

The relationship between parts of a whole, expressed as fractions, percentages, or ratios.

Capital Market Line

A line used in the capital asset pricing model to illustrate the rates of return for efficient portfolios depending on the risk (measured by standard deviation).