πŸ“’ Too many exams? Don’t know which one suits you best? Book Your Free Expert πŸ‘‰ call Now!


    Question

    Which of the following instruments is commonly used by

    banks to manage short-term liquidity needs?
    A Treasury Bills Correct Answer Incorrect Answer
    B Certificate of Deposit Correct Answer Incorrect Answer
    C Commercial Paper Correct Answer Incorrect Answer
    D Repo Agreements Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Banks use various instruments for short-term liquidity management: ο‚· Treasury Bills (T-Bills) – Issued by the government for short-term borrowing. ο‚· Certificates of Deposit (CDs) – Fixed-term deposits issued by banks. ο‚· Commercial Paper (CPs) – Unsecured promissory notes issued by companies. ο‚· Repo Agreements (Repurchase Agreements) – Short-term borrowing against securities.

    Practice Next
    ask-question