A centralized depository lets managers reduce the size of highly liquid accounts and invest the funds, generally at the higher interest rates offered for large deposits, to generate maximal returns.

Question

Quizplus · Accepted Answer

A centralized depository allows for the pooling of funds, which enables managers to reduce the amount of cash held in highly liquid, low-interest accounts. By consolidating these funds, they can make larger deposits that often qualify for higher interest rates, thereby maximizing returns on available cash.

A Centralized Depository Lets Managers Reduce the Size of Highly