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WAEC Commerce 2019 Question 25

Question 25

Banking

A proportion of the total deposit that a commercial bank must keep as cash and convertible papers is

  1. A.special deposit.
  2. B.liquidity ratio.
  3. C.interest rate.
  4. D.bank rate.
Show the answer and explanation

Answer: B (liquidity ratio.)

Explanation

The liquidity ratio is the share of deposits a bank must hold in cash and assets easily turned into cash.