Question

1) Banks own and owe several different types of assets and liabilities. For various reasons, banks prefer certain assets and liabilities over others. The following questions distinguish among different types of bank assets and liabilities.

Which of the following correctly orders bank liabilities from most liquid to least liquid?

A.  Savings deposits, large time deposits, and checkable deposits B.  Reserves, checkable deposits, and small time deposits

C.  Checkable deposits, savings deposits, and small time deposits D.  Small time deposits, large time deposits, and securities

E.  Consumer loans, checkable deposits, and reserves

2) Banks own and owe several different types of assets and liabilities. For various reasons, banks prefer certain assets and liabilities over others. The following questions distinguish among different types of bank assets and liabilities.

Consider the following bank assets and liabilities:

I. checking accounts
II. Large time deposits
III. State and local government securities
IV. Vault cash
V. Real estate loans

Bank assets include: A.  IV, and V only B.  III, IV, and V only C.  II, III, and IV only D.  I and V only

3) Banks own and owe several different types of assets and liabilities. For various reasons, banks prefer certain assets and liabilities over others. The following questions distinguish among different types of bank assets and liabilities.

True or False: Bank assets serve as the primary source of funds that banks use to acquire liabilities.

Answer 1

ans 1=option c

Checkable deposits are most liquid, then savings deposits, and lastly small time deposits

Deposits are liabilities owed by the common bank to the depositor. When one opens a bank a/c & makes a cash deposit, she surrenders licit title to the cash then it becomes an asset for the bank. Consecutively , the a/c is a liability for the bank.

There are many different kinds of deposit accounts like current a/c, savings a/c, call deposit a/c, money market accounts & CDs