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    Question

    Which of the following best describes the objective of

    liquidity management?
    A ensure profitability Correct Answer Incorrect Answer
    B ensure liquidity Correct Answer Incorrect Answer
    C Either a or b Correct Answer Incorrect Answer
    D Both a and b Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Liquidity management aims to ensure liquidity and also profitability. Ultimate objective of liquidity management is profitability and long term operating viability of the organization by ensuring liquidity. 1.    to protect/enhance the market valu of net worth 2.    to increase the Net Interest Income (NII) 3.    to maintain/protect spreads or Net Interest Margin(NIM)

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