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QUESTION
Which of the following regarding the (core deposits / assets) ratio is true?
Which of the following regarding the (core deposits / assets) ratio is true?
A high ratio is generally better because it is safe for a bank to rely on its core deposits as a source of funding.
A high ratio means the bank relies more on other sources of funding like borrowed funds.
A low ratio generally means low liquidity risk.
A low ratio shows that a bank uses its core deposits to supply loans and this is good because core deposits are insured by the FDIC.
None of the above.
