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Unformatted text preview: MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Banks acquire the funds that they use to purchase income-earning assets from such sources as 1) _______ A) reserves. B) bank capital. C) cash items in the process of collection. D) all of the above. E) only A and B of the above. 2) The _____ are the costs associated with deposit outflows, the _____ excess reserves banks will want to hold. 2) _______ A) higher; less B) lower; more C) higher; more D) None of the above, since deposit outflows cannot be anticipated. 3) Banks' holdings of securities consist primarily of 3) _______ A) Treasury and government agency securities. B) state and local government securities. C) tax-exempt municipal securities. D) corporate securities. 4) Which of the following are reported as liabilities on a bank's balance sheet? 4) _______ A) Nontransaction deposits B) Bank capital C) Loans D) Only A and B of the above E) Only B and C of the above 5) When a lender refuses to make a loan, even though borrowers are willing to pay the stated interest rate...
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- Spring '08