CIMA Exam CIMAPRA17-BA1-1 Topic 1 Question 77 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam

Question #: 77
Topic #: 1

Central banks inspect and sometimes set minimum limits on the reserves held by commercial banks. Which ONE of the following statements is NOT a reason that central banks seek to influence the reserves of commercial banks?

ATo influence commercial banks' ability to create credit

BTo avoid the commercial banks running out of liquidity

CTo regulate the profits of commercial banks

DTo prevent the collapse of the banking system

Show Suggested Answer

Suggested Answer: D

by Elli at Nov 25, 2023, 05:03 PM

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Man

4 days ago

That makes sense, central banks want to ensure stability in the banking system.

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Yuki

6 days ago

I disagree, I believe the answer is D) To prevent the collapse of the banking system.

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Jean

10 days ago

Option C seems like a strange one. Regulating the profits of commercial banks? I don't think that's a primary reason for central bank reserve requirements.

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Man

14 days ago

I think the answer is C) To regulate the profits of commercial banks.

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