Different banks in a country offers high interest rate on Negotiable certificate of deposits. It a. Attracts banks to increase their deposit b. Banks will become insolvent c. Attracts banks to purchase more assets d. Attracts customers to increase their loan

Q: Which innovation has caused the most trouble for financial institutions that issue residential…

A: Answer: The correct answer is option A. Securitization.

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A:

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A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

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A: Commercial PaperCommercial paper is promissory notes that represent loans issued by the companies.…

Q: refinancing rate

A: The refinancing rate refers to the interest rate which is required to be paid by the banks when they…

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Q: What kind of Interest does a negotiable certificate of deposit issued by large commercial banks…

A: A negotiable certificate of deposit (NCD), also known as a CD

Q: q17 Which of the following types of loans has lower interest rate compared to others? a. Line of…

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Q: Which of the following statements is INCORRECT? Select one: а.

A: The answer is given below:

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Regulation of Commercial Banks

The main function of any commercial bank is accepting deposits and lending money to borrowers. Apart from these two activities, commercial banks provide a host of other services to their customers, like discounting bills of exchange, acting as a custodian of a customer's will, and so on. In the absence of a proper regulatory framework or proper regulations in place, the commercial banks would have ended up charging exorbitant or varied rates of interest or service charges on the funds loaned by them or the services performed by them.