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:

Gummi Candy

A chewy, often fruit-flavored confection made from gelatin, sugar, and various flavorings.

Income Taxes

Taxes levied by the government on individuals or entities based on their net income or profit.

Necessary Deductions

Expenses or amounts that are required to be subtracted from income, often for the purpose of calculating taxable income.

Printer Units

Devices that produce hard copy outputs from digital data.