Which of the Following Statements Is True

question 3

Multiple Choice

Which of the following statements is true?

• A)The liquidity index compares the liquidity of a single institution with the industry average and thus measures the liquidity risk of that particular institution.
• B)The liquidity index provides guidance for FIs on how much liquidity they should hold on a seasonal basis.
• C)The liquidity index measures the potential losses an FI could suffer if new market entrants take away market share from the existing institutions.
• D)The liquidity index measures the potential losses an FI could suffer from a sudden disposal of assets compared to the mount it would receive at a fair market value established under normal sales conditions.

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Definitions:

Permanent Full-Time

Employment status where individuals are hired for a continuous duration without an anticipated end date and work a full schedule, usually defined by the employer.

Historical Percentages

Percentages calculated from past data, used to make predictions or assessments about future trends.

Multinomial Experiment

An experiment involving outcomes that can fall into one of several categories, generalizing binomial experiments.

Fixed Number

A value that remains constant and does not change in different situations or equations.