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WAEC Commerce 1994 Question 92

Question 92

Banking

It is important for banks to maintain a high percentage of cash ratio in order to

  1. A.make more profits
  2. B.invest in long term ventures
  3. C.encourage more cash deposits
  4. D.meet their customers' demand for cash at any time
  5. E.lend to their customers at any time
Show the answer and explanation

Answer: D (meet their customers' demand for cash at any time)

Explanation

Banks keep cash so they can pay depositors who withdraw at any time.