Which of the following is a reason why a commercial bank may hold government securities: A

1. Commercial banks hold securities for the following reasons:

As holding a security with government/central banks is safer and less risky the commercial banks intends to hold with government. Government is also pays the fixed amount of returns and rate of return earning is 100% safe.  

So "A" is correct answer”To improve its risk return profile".

2. Best statement regarding Behavioral Finance.

Behavioral finance explains how hypotheses test behave in observed investors and markets portfolio. As human behavior is unpredictable so it is difficult understand completely. On the past performances and data only one can assume the behavior. Even the economy can vary in different situations. Its core method is to find out how humans make decagons in investments. By understanding investor behavior, it may be possible to construct investment solutions that will be closer to the rational solution of traditional finance and, because of adjustments reflecting behavioral insights, easier to accept and remain committed to.

So "A" is correct answer "Behavioral Finance has more support in experimental settings than market settings.