The answer is D. An increased interest rate.
The bank will increase the interest rates on loans to get a return on their expenses.
Answer: The correct answer is "c. normally sets the financial objectives first and then sets the objectives in the other perspectives to accomplish the financial objectives.".
Explanation: The balanced scorecard approach normally sets the financial objectives first and then sets the objectives in the other perspectives to accomplish the financial objectives.
The balanced scorecard states that we must focus on the organization from four perspectives and that goals, measures, rules or objectives be developed for these perspectives.
The 4 perspectives are:
- Financial: which is the most important one whose objectives are established first and the objectives of the other perspectives will be established in order to meet the objective of the financial perspective.
-Client
-Internal processes
-Organizational capacity
A prospectus is given to potential investors.
Answer:
The explanation is given as follows.
Explanation:
<u>Task 1: </u>
<u>The higher the percentage of assets a bank holds as loans, the higher the capital requirement.</u>
When the owners of the bank borrow $100 to supplement their existing reserves , both reserves and debt increase by $100 , therefore increase in debt as in any balance sheet , the total value of accounts on the left hand should be equal to the right hand , so when there is increase in reserves , there will be increase in debt.
<u>Task 2:</u>
<u>It specifies a minimum leverage ratio for all banks
</u>
leverage ratio initially = total assets / capital = 1750 / 125 = 14
leverage ratio new value = total assets / capital = 1850 / 125 = 14.8 ( the assets increase by $100 with increase in reserves)
<u>Task 3</u>
<u>Its intended goal is to protect the interests of those who hold equity in the bank.</u>
Capital requirement are there to ensure that bank have enough capital to repay the depositors and debtors and if a bank holds a higher percent of risky assets , capital requirements will be higher so that the bank remains solvent hence option a is right answer.
