Which of the Following Statements Is NOT True

question 35

Multiple Choice

Which of the following statements is NOT true?

• A)Stored liquidity management involves liquidation of assets.
• B)Traditionally DIs have stored cash reserves at the Federal Reserve and in their vaults to overcome liquidity risk.
• C)When the DI uses its cash as the liquidity adjustment mechanism, both sides of its balance sheet contract.
• D)DIs hold cash reserves in excess of the minimum required to meet liquidity drains.
• E)A DI sustains no cost under stored liquidity risk management.

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Definitions:

Time Compression

Strategies or techniques used to reduce the duration of processes or activities, aiming to increase efficiency and reduce costs in operations and supply chain.

Time-Compression

Strategies or technologies that reduce the time between the initiation and completion of a process or project.

Policy Decisions

High-level choices made by organizations or governments that set directions, establish regulations, or guide the implementation of strategies.

Monte Carlo Simulation

A statistical technique that uses random sampling and repeated trials to calculate outcomes of uncertain variables.