Banks can increase their potential interest revenues by restructuring their asset portfolio to contain fewer ____ and more ____.
A) Treasury bonds; commercial loans
B) Treasury bonds; excess reserves
C) consumer loans; Treasury bills
D) none of the above

Question

Quizplus · Accepted Answer

Treasury bonds generally have lower interest rates compared to commercial loans, which have higher interest rates. Therefore, by shifting their asset portfolio to contain fewer Treasury bonds and more commercial loans, banks can potentially earn higher interest revenues.

Banks Can Increase Their Potential Interest Revenues by Restructuring Their