Exam 11: Liquidity Management

Which of the following has caused banks difficulty in estimating liquidity needs?

In lagged reserve requirement accounting the transactions computation period begins three days before the maintenance period.

The structure-of-deposits method focuses on the different types of deposits of the bank and the probability of withdrawal of each of these types within a specific planning horizon.

The primary advantage(s) of liability management include:

If the loans/deposits ratio is relatively high for a bank, this implies an emphasis on:

The extent to which legal reserves exceed cash that would normally be held by banks without these requirements is a form of:

Estimating liquidity needs involves:

To meet reserve requirements banks can use Federal Reserve deposits and vault cash.

A funds management approach focuses primarily on liability management.

Uniform legal reserve requirements for all U.S. banks was implemented under the Garn-St. Germain Act of 1982.

Financial risk increases the variability of earnings per share.

Volatile liabilities in the UBPR include all of the following EXCEPT:

Medium-term notes normally have a maturity equal to:

Money market instruments include all of the following EXCEPT:

The best approach to measuring liquidity takes into account changes over time in both liquidity needs and sources. A financial ratio that does this consists of _________ in period t over _________ in period t.

The federal reserve requirement for transactions deposits over a minimum cutoff level such as $46.5 million is:

If the level of interest rates is high, an aggressive liquidity approach would entail purchasing short-term securities.

Most primary reserves are:

Historically, liability management was the primary means by which banks met cash demands.

Which of the following is NOT a category of deposits?