Liquidity contributes to the bank's achievement of all of the following except one.Which is the exception?

Question

Quizplus · Accepted Answer

Liquidity refers to a bank's ability to meet the demand for cash withdrawals from its customers. It contributes to the confidence of its depositors as they know that their funds are readily available, the ability to pay funds out to depositors on demand, flexibility in responding to investment opportunities, and ability to make an immediate loan to a valued customer. However, liquidity does not directly contribute to the income of the bank. In fact, maintaining liquidity can sometimes result in a lower profit margin for the bank.

Liquidity Contributes to the Bank's Achievement of All of the Following