Which of the Following Is an Asset of a Bank

question 61

Multiple Choice

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

• A)deposits of its customers and loans to its customers
• B)deposits of its customers but not loans to its customers
• C)loans to 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:

Strike Price

The set price at which the holder of a financial instrument can buy or sell the underlying asset in options trading.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy an asset at a specified price within a particular time period.

Out-Of-The-Money

A term used to describe an option contract that would not result in a profit if exercised at the current market level.

Convertible Bond

A type of bond that can be converted into a predetermined amount of the company's equity, usually at the option of the bondholder.