Answer the following questions with True or False:

8. Demand deposits are the most expensive source of a bank's funds. 9. Holding large amounts of bank capital helps prevent bank failures because it can be used to absorb the losses resulting from a deposit outflow. 10. Bank managers seek the highest returns possible subject to minimizing risk and making adequate provisions for liquidity. The federal funds rate is the interest rate in the market for federal government loans. 11. 12. The risk that interest payments will not be made, or that the face value of a bond is not repaid when a bond matures is default risk. 13. Loans are the major revenue-generating assets for banks