For a bank with deficient capital ratios, which of the following actions could be taken to increase the capital ratios, holding everything else the same?
A) Cut the bank's dividend payment.
B) Increase the bank's burden.
C) Repurchase the bank's common stock on the open market.
D) Increase the bank's growth rate by making additional commercial loans.
E) Reduce the bank's holdings of Treasury securities.

Question

Quizplus · Accepted Answer

Cutting the bank's dividend payment would retain more earnings within the bank, thereby increasing its capital and improving its capital ratios.

For a Bank with Deficient Capital Ratios, Which of the Following