Question

“Bank managers should always seek the highest return possible on their assets.” Is this statement true, false, or uncertain? Explain your answer.

Short answer

False, Because a bank manager should make thorough knowledge about risk and expected return of the asset.

Step-by-step solution

Concept Introduction

Managers hold the executive and administration powers of the banks. Managers are accountable for the working of the entity as the whole planning; directing and controlling powers of assistants are in the manager's hands.

Explanation

False. Assuming a resource has a great deal of risks, a bank administrator might not have any desire to hold it regardless of whether it has a better yield than different resources. Hence a bank director needs to think about risk as well as the normal return while choosing to hold a resource.