Which of the following statements is not true? A Bank's primary reserves are short-term assets that...

Which of the following statements is not true?

A Bank's primary reserves are short-term assets that can provide the bank with additional liquidity while safely earning some interest income

B Bank liquidity refers to the bank's ability to accommodate deposit withdrawals and loan requests, and pay off other liabilities as they come due

C Higher concentration ratios imply higher correlation among default rates for banks' loan portfolio

D Value at risk（VAR）is a common approach to assessing risk in financial firm's trading accounts

Solutions

Expert Solution

The statement which is not true is A - Bank's primary reserves are short term assets that can provide the bank with additional liquidity while safely earning some interest income.

Bank's reserve are not short term assets because these needs to be kept by the bank in order to meet unforeseen contingencies and withdrawals. This money cannot be lent to anybody and must be kept by the Bank in its vault or in the central Bank.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Which of the following pairs of statements are true regarding the immune system Primary organs of...

Which of the following pairs of statements are true regarding the immune system Primary organs of the immune system are generative. The thymus gives rise to both B and T cells Primary organs of the immune system are generative. Maturation of both B and T cells occur in the bone marrow. B cells originate in the bone marrow. T cells originate in the thymus Maturation occurs in the secondary lymph organs. T and B cells mature in the spleen or...

Assets: $200 Reserves; $5000 Short term Bonds; $6000 Long Term Loans Liabilities: $7000 Checkable Deposits; $3000 Fixed...

Assets: $200 Reserves; $5000 Short term Bonds; $6000 Long Term Loans Liabilities: $7000 Checkable Deposits; $3000 Fixed Rate Borrowings; $1200 Capital What is the equity multiplier for this bank? Why would a bank want to increase its EM? Why would a bank decrease its EM?

Which of the following statements about a competitive firm's supply curve is true? The short and...

Which of the following statements about a competitive firm's supply curve is true? The short and long run supply curves are the MC curve above ATC. The short run supply curve is the LMC curve above the minimum of AVC. The long run supply curve is perfectly elastic at the minimum of long run average cost. None of the other answers is correct. The short and long run supply curves are the SMC curve above AVC.

Which of the following statements about the total debt to total assets ratio is NOT true?...

Which of the following statements about the total debt to total assets ratio is NOT true? The debt ratio is calculated by dividing a company's total liability by its total assets. "The higher the total debt to total asset ratio, the greater the financial risk." "If a company's debt to asset ratio is less than 0.5, most of its assets are financed through debt." A highly leveraged company could be in danger if its creditors demand repayment.

which of the following statements concerning the classification of deferred tax assets and liabilities is true

Which of the following statements about financial institutions is true?: An investment company’s primary source of...

Which of the following statements about financial institutions is true?: An investment company’s primary source of funds is loans and its primary use of funds is securities An investment company’s primary source of funds is shares and its primary use of funds is loans Stock funds or equity funds involve more risk than money market or bond funds. An insurance company’s primary source of funds is deposits and its primary use of funds is loans A commercial bank’s primary source...

Which of the following statements correctly describes the short-term response towards a reduction in wealth. The...

Which of the following statements correctly describes the short-term response towards a reduction in wealth. The FE curve stays unchanged The FE curve shifts to the right The FE curve shifts to the left None of the above 0.3 points QUESTION 10 Which of the following statements correctly describes the short-turn response towards an increase in current output The IS curve stays unchanged The IS curve shifts to the right The IS curve shifts to the left None of...

State whether the following statements are true of false. If they are true, give a short...

State whether the following statements are true of false. If they are true, give a short justification. If they are false, give a counterexample. For each of the following, P(x) is a polynomial. (a) If P(x) has only even powers, and P(a) = 0 then x^2 ? a^2 divides P(x). (b) If P(x) has only odd powers, and P(a) = 0 then x^2 ? a^2 divides P(x). (c) If P(x) has only even powers, then P(x) has at least one...

1. Which of the following statements is true? a.Macroeconomic policies are always effective in the short-run...

1. Which of the following statements is true? a.Macroeconomic policies are always effective in the short-run because output is at its potential level. b. Macroeconomic policies are always effective in the short-run because they affect output through AD, but not prices. c. Macroeconomics policies are always effective in the long-run because output is at its potential level. d. Macroeconomic policies are effective in the short-run as well as in the long-run because both output and price are at their potential...

1. Which of the following statements are true about short selling? Check all that apply: The...

1. Which of the following statements are true about short selling? Check all that apply: The investor involved in short selling anticipates that the share price will fall. Short selling is the sale of a security that is not owned by the seller. The investor involved in short selling anticipates that the share price will increase. Short selling means that an investor purchases securities using funds borrowed from her broker. Short sellers borrow securities and sell them immediately. 2. The...

Subjects