In practice, an FI that has 15 per cent of its liabilities in demand deposits and other transaction accounts knows that normally only a small proportion of these deposits will be withdrawn on any given day.

Question

Quizplus · Accepted Answer

This statement is true as demand deposits and other transaction accounts are typically used for everyday transactions, and therefore, only a small portion of these deposits are expected to be withdrawn on any given day.

In Practice, an FI That Has 15 Per Cent of Its