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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