Asked by Myranda Jimenez on Jun 07, 2024
Verified
Vault cash would be considered
A) a primary reserve.
B) a secondary reserve.
C) both a primary and a secondary reserve.
D) neither a primary nor a secondary reserve.
Vault Cash
Physical currency held by banks within their vaults, used to meet customer withdrawals and other cash needs.
Primary Reserve
It is the part of a country's reservable deposits held in cash or in deposits with the central bank, used to manage liquidity and fulfill regulatory requirements.
Secondary Reserve
Secondary Reserve includes assets that are not as liquid as primary reserves but can still be quickly converted into cash.
- Explain the regulatory and supervisory functions of the Federal Reserve, including reserve requirements for commercial banks.
Verified Answer
RT
Rahsheeda ThomasJun 13, 2024
Final Answer :
A
Explanation :
Vault cash is the physical currency and coins held by a bank or financial institution, which is available to meet the withdrawal demands of its customers. It is considered a primary reserve because it is directly held by the bank and can be used to satisfy a customer's withdrawal request.
Learning Objectives
- Explain the regulatory and supervisory functions of the Federal Reserve, including reserve requirements for commercial banks.