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Question
The First State Bank of Summerville knows that, if it issues a large amount of the negotiable CD, the interest cost on the CD may be very high due to tight money supply conditions. As a result, it chooses to ration the credit and lend only to its most loyal clients. What risk factor that affects a bank's use of nondeposit sources of funds is the concern here?
A. Interest rate changes
B. The length of time the funds will be required
C. The relative cost of raising the funds
D. Credit availability
E. Regulations
Answer
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Related questions
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