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If Bank a Sells Some Its Loans to Bank B

Question 61

Multiple Choice

If Bank A sells some its loans to Bank B for cash, everything else equal:


A) Bank A's assets decrease and Bank B's assets increase.
B) Bank A becomes less liquid while Bank B becomes more liquid.
C) Banks A's total assets do not change, but Bank A is more liquid.
D) Bank A's liabilities decrease by the amount of the loans that are sold.

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