Since One Function of Financial Intermediaries Is to Provide Liquidity

question 8

Multiple Choice

Since one function of financial intermediaries is to provide liquidity:

• A) they must keep all of their funds in short-term securities.
• B) they keep almost all of their funds in cash.
• C) they must know approximately how much liquidity their customers will need each day and have these funds available.
• D) regulations require financial intermediaries to keep 50% of their assets in cash.

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Definitions:

LAN

Local Area Network; a computer network that interconnects computers within a limited area such as a residence, school, or office building.

Universal Service

A principle that aims to provide all citizens access to essential telecommunications services at an affordable price.

Coaxial

A type of cable that is used for transmitting television signals, internet connectivity, and other data.

Fiber Optic

Technology that uses thin, flexible fibers of glass or other transparent solids to transmit light signals for telecommunications or computing.