Which of the Following Is NOT a Potential Cause of Liquidity

question 42

Multiple Choice

Which of the following is NOT a potential cause of liquidity risk for a DI?

• A)A decrease in the DI's stock price caused by market factors.
• B)An increase in requests to fund large amounts of loan commitments.
• C)A decrease in the availability of short-term borrowed funds.
• D)An increase in requests by depositors to withdrawal large amounts of deposits.
• E)A decrease in asset prices of securities held in the investment portfolio.

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Definitions:

Condorcet Voting Paradox

A scenario in social choice theory where collective preferences are cyclic (i.e., not transitive) even if the individual preferences within the group are linear and transitive.

Transitivity of Preferences

The economic theory that if an individual prefers option A over B, and B over C, then they should also prefer A over C, ensuring consistent decision-making.

Pairwise Voting

A voting system in which candidates are compared and ranked in pairs, with outcomes determined by the number of pair contests each candidate wins.

Italy

A country located in Southern Europe, known for its rich history, culture, fashion industry, and cuisine.