Secondary reserves

Definition:

Reserves held by depository institutions in excess of those mandated by reserve requirements. These reserves are often held in the form of assets that can be quickly and easily converted to cash and are used to meet unanticipated obligations.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Liquid

In context of securities, easily traded or converted to cash. In context of a corporation, the state of having enough cash and cash equivalents to cover short-term obligations.

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