MGT411 Quiz 3 by Iqra Azhar

MGT411 · Quiz No.3 Jan2026 · VU Zone | Iqra Azhar Official · Our Services

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90% To 100% Marks

Q1. Bank wishes to hold excessive reserves of 7% of deposits, it would keep reserves of 9% of $95,000, what amount will be available for the loans?

•  A) 89,300
•  B) 79,800
•  C) 86,450
•  D) None of give

Answer: D) None of give (Correct loan amount = $88,350)

Q2. Which of the following type/s of transaction/s affect the balance sheets of both the central bank and the banking system?

•  A) A foreign exchange intervention
•  B) An open market operation
•  C) Central bank’s extension of a discount loan
•  D) All of the given options

Answer: D) All of the given options

Q3. Which type of credit is used for short term basis by the central bank?

•  A) Secondary credit
•  B) Seasonal credit
•  C) Primary credit

Answer: C) Primary credit

Q4. Which is not a principle of central bank design?

•  A) Fiscal policy by competent persons
•  B) Decision making by committee