The relative importance of various asset items on a chartered bank's balance sheet reflects a bank's pursuit of which two conflicting goals?
A)profits and risk
B)liquidity and profits
C)assets and liabilities
D)buying and selling government securities

Question

Quizplus · Accepted Answer

The two conflicting goals are liquidity and profits. Banks want to have a balance between the two, as they need to have enough liquid assets to meet potential customer demands for withdrawals or loans, but also want to make profits by investing in higher yielding assets such as loans or securities. Therefore, the relative importance of various asset items on the balance sheet reflects the bank's pursuit of these two goals.

The Relative Importance of Various Asset Items on a Chartered