Liquidity risk may be reduced by which of the following?
A)the purchase of fed funds, repurchase agreements, and Eurodollars
B)the purchase of currency swaps
C)the purchase of interest rate swaps
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The purchase of fed funds, repurchase agreements, and Eurodollars can all help reduce liquidity risk by providing access to short-term funds that can be easily converted into cash if needed. Currency swaps and interest rate swaps do not directly address liquidity risk.

Liquidity Risk May Be Reduced by Which of the Following