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If a Local Bank Decides to Convert Some of Its

Question 62

Multiple Choice

If a local bank decides to convert some of its U.S.Treasury securities into cash,which it will hold in its vault,what impact will this have on the bank's balance sheet?


A) Reserves would increase, liabilities would stay the same, and owner's equity would decrease.
B) Reserves would increase, liabilities would stay the same, and owner's equity would increase.
C) Reserves would decrease, liabilities would decrease, and owner's equity would decrease.
D) Reserves would decrease, liabilities would stay the same, and owner's equity would decrease.
E) Reserves would stay the same, liabilities would increase, and owner's equity would decrease.

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