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True False Question ,please explain it 3 sentence Saving money with bank is regarded as one...

True False Question ,please explain it 3 sentence

Saving money with bank is regarded as one of the safest investments as there is no risk of losing capital

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Answer #1

The correct answer is True

Explanation:- Money saved in a bank has no risk of losing capital because the bank maintains a certain amount of deposits as reserves which it will not lend .The amount of reserves that banks must hold is specified by the fed in the form of reserve requirement ratio. The reserves held by the bank is used to repay depositors in case the bank faces liquidity crisis. Therefore we can conclude that money saved with the bank has no risk of losing capital and hence regarded as one of the safest investments.

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