Which of the following statements most accurately describes the task of bank asset management?
A)Banks seek the highest returns possible subject to minimizing risk and making adequate provisions for liquidity.
B)Banks seek to have the highest liquidity possible subject to earning a positive rate of return on their operations.
C)Banks seek to prevent bank failure at all cost;since a failed bank earns no profit,liquidity needs supersede the desire for profits.
D)Banks seek to acquire funds in the least costly way.

Question

Quizplus · Accepted Answer

Bank asset management involves managing the bank's assets in order to maximize returns while minimizing risk and maintaining sufficient liquidity. Therefore, option A accurately describes the task of bank asset management. Option B is incorrect because banks prioritize earning a positive rate of return over having the highest possible liquidity. Option C is incorrect because while preventing bank failure is important, banks still prioritize making profits. Option D is incorrect because while banks do seek to acquire funds in a cost-effective manner, it is not the primary focus of asset management.

Which of the Following Statements Most Accurately Describes the Task