3 a-i) Identify the following as a source or use of funds (or neither) for a ban
ID: 2810280 • Letter: 3
Question
3 a-i) Identify the following as a source or use of funds (or neither) for a bank:
a) A bank originates a new loan
b) A bank repurchases shares of its stock
c) A bank retains earnings
d) A bank obtains “purchased CDs” (That is, a bank obtains deposits obtained by another bank – this is a purchased liability for the purchasing bank. The purchasing bank obtains the deposit, and all of the obligations associated with that deposit).
e) A bank sells government securities from their asset security portfolio
f) The federal reserve bank increases their reserve requirement
g) A bank originates a new car
h) A bank increases their federal funds purchased
i) A bank sells a mortgage loan
Explanation / Answer
3
a. source of fund
b. use of fund
c.source of fund
d.source of fund
e.source of fund
f.use of fund
g.use of fund
h.use of fund
i.use of fund
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