Fractional reserve banking refers to a banking system in which bank loans are less than bank reserves. bank deposits are less than bank reserves. bank reserves are less than total deposits. bank reserves are only a fraction of required reserves.
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- If a bank credit card customer repays the full balance on their credit card, and the bank immediately puts the proceeds into Federal Reserve deposits, then Risk-weighted assets increase Risk-weighted assets decrease Risk-weighted assets stay the sameA bank's net interest margin represents the proportion of its investments that are financed with borrowed funds. Group of answer choices: True FalseA deposit institution can offset its liquidity risk to reduce its net deposit drains by reducing its assets through all of the following methods except: a. Borrowing funds or issuing equity. b. Calling back its loans. c. Use cash reserve. d. Selling securities.
- Which of these statements about banks is true: i) Banks cannot convert all deposits in the Reserves Accounts into loans. ii) Banks can convert all deposits in the Reserves Accounts into loans. iii) Banks can create money iv) Banks can issue money. v) Commercial Banks decide on the reserves ratio O i and iii O ii and iii ii and iv i and vA bank has a positive repricing gap. This implies that a. some RSAs are financed by fixed-rate liabilities. b. some RSLs are financing fixed-rate assets. c. some RSAs are financing equity. d. the bank has no fixed-rate assets.What is the term of interest on bank overdraft?
- Bank overdrafts that are repayable on demand and the bank balance often fluctuates from positive to overdrawn shall be classified as Operating activities Investing activities Financing activities Component of cash and cash equivalentsWhat is the normal balance for bank overdraft and why?A bank's required reserve ratio is equal to: Checkable Deposits/Required Reserves Net Worth/Assets Loans/Checkable Deposits Required Reserves/Checkable Deposits give answer with explanation
- what is the maximum amount of loans that the Second National Bank can make if it holds only the required reserves?Depositing money into a commercial bank is investing in a a.secondary market. b.subprime market. c.predatory lending market. d.primary market.1. Rank the following types of bank liabilities, first according to their level of liquidity risk, and then according to their interest rate risk. Then rank them according to their current cost to the bank. Explain why the rankings vary. DDAs Interest-checking accounts MMDAs Small-time deposits Jumbo CDs Federal funds purchased Eurodollar liabilities Federal Home Loan Bank advances