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

question 54

Multiple Choice

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

• A)the resulting shrinkage of the FI's balance sheet.
• B)the 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:

Gardenburger

Typically refers to a brand or type of vegetarian burger made from garden vegetables, often used as a meat substitute.

Beer

An alcoholic beverage made from the fermentation of malted barley and other cereals, flavored with hops.

Budget Constraint

A concept in economics representing all the combinations of goods and services that a consumer can afford given their income level and the prices of goods.

Opportunity Set

The range of options available for a person or organization to choose from, given their resources and constraints.