A Disadvantage of Using Purchased Liquidity Management to Manage a FI's

question 71

Multiple Choice

A disadvantage of using purchased liquidity management to manage a FI's liquidity risk is

• A)the resulting shrinkage of the FI's balance sheet.
• B)the relatively high cost of purchased liabilities.
• C)the accessibility of international money markets.
• D)tax considerations.
• E)loss of flexibility as a result of dependence upon purchased liabilities.

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Definitions:

Organization

An organization is a group of people who work together structurally to achieve a common goal or set of objectives through coordinated activities and efforts.

Critical Thinking

The objective analysis and evaluation of an issue in order to form a judgment.

Problem Solving

The process of identifying a challenge and finding an effective solution for it.

Achievement-oriented Leadership

A leadership style focused on setting challenging goals, emphasizing excellence, and demonstrating confidence in team members' ability to meet objectives.