Which of the following are primary concerns of the bank manager?
A)maintaining sufficient reserves to minimize the cost to the bank of deposit outflows
B)extending loans to borrowers who will pay low interest rates,but who are poor credit risks
C)acquiring funds at a relatively high cost,so that profitable lending opportunities can be realized
D)maintaining high levels of capital and thus maximizing the returns to the owners

Question

Quizplus · Accepted Answer

Maintaining sufficient reserves to minimize the cost to the bank of deposit outflows is a primary concern for a bank manager as it ensures that the bank has enough funds to meet the demands of its depositors.

Answer: C 
 Acquiring funds at a relatively high cost, so that profitable lending opportunities can be realized is a primary concern for a bank manager as the bank needs to earn more on its loans than the cost of acquiring funds.

Answer: D 
 Maintaining high levels of capital and thus maximizing the returns to the owners is a primary concern for a bank manager as it ensures the financial stability of the bank and helps attract investors. However, extending loans to poor credit risks who pay lower interest rates is not a primary concern as it poses a risk to the bank's financial stability.

Which of the Following Are Primary Concerns of the Bank