Banking and Financial Institutions Balance Sheet Quiz

To maximize profits from loans

To ensure ability to meet short-term obligations (correct)

To maintain high levels of excess reserves

To minimize credit risk exposure

Assets and liabilities (correct)

Cash items and bank capital

Reserves and securities

Deposits and loans

No changes in other parts of the balance sheet are necessitated (correct)

It leads to an immediate decrease in loans to compensate

It prompts the sale of securities to cover the outflow

It requires an increase in bank capital to maintain stability

<p>To absorb potential losses and provide a cushion against insolvency</p> Signup and view all the answers

<p>Optimizing the composition of assets to maximize returns and minimize risk</p> Signup and view all the answers