Which of the following observations is NOT true?
A)Traditionally, DI managers have relied on purchased liquidity management as the primary mechanism of liquidity management.
B)Today, many DIs rely on purchased liquidity management to deal with the risk of cash shortfalls.
C)The largest banks with access to the money market and other nondeposit markets for funds rely on purchased liquidity management to deal with the risk of cash shortfalls.
D)Purchased liquidity management and stored liquidity management are ways of managing a drain on deposits.
E)None of the above.

Question

Quizplus · Accepted Answer

This observation is not true as traditionally, DI managers have relied on stored liquidity management (such as holding cash reserves) rather than purchased liquidity management.

Which of the Following Observations Is NOT True