1. Banks try to minimize the amount of cash assets and keep only those required by law or for operational needs. a. true b. false 2. How does bank capital reduce bank risk? a. It provides a buffer for losses to be absorbed. b. Create unlimited growth opportunities. c. Limits access to financial markets. d. All previous. e. a and b 3. To determine reserves, banks and the Federal Reserve use: a. an agile accounting reserve system b. a contemporary accounting reserve system c. a lagged accounting reserve system d. none of the above