Holdings of U

question 21

Multiple Choice

Holdings of U.S.Treasury securities are classified on a DI's balance sheet as

• A)assets, because U.S.Treasury securities are default risk-free.
• B)liabilities, because the DI must pay cash in order to acquire the securities.
• C)assets, because securities holdings represent a use of funds for investment.
• D)liabilities, because the Treasury securities must be pledged as collateral against discount window borrowing.
• E)assets, because the market for U.S.Treasury securities is the most liquid in the world.

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Definitions:

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