Use the following balance sheet (values in thousands of dollars) to answer the question. If the bank experiences a $50 000 sudden liquidity drain caused by a loan commitment drawdown, what will be the impact on the balance sheet if stored liquidity management techniques are used?
A) a reduction in cash of $21,000 and an increase in demand deposits of $29,000
B) a reduction in securities and/or current loans totalling $50,000
C) a reduction in cash of $21,000 and a decrease in securities holdings of $29,000
D) a decrease in equity of $50,000
Correct Answer:
Verified
Q30: A contagious run, or bank panic, differs
Q54: Australia has recently developed a market for
Q55: As part of the Basel III liquidity
Q56: Which of the following is not a
Q57: Which type of financial intermediary is more
Q58: Use the following balance sheet (values
Q60: The Reserve Bank of Australia (RBA) took
Q62: The maturity ladder model allows a comparison
Q63: Stored liquidity management is an asset-side adjustment
Q64: APRA requires every FI to hold sufficient
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents