Which of the following is not a source of liquidity for financial institutions?
A)Deposits
B)Money market borrowings
C)Sale of marketable securities
D)Dividend payments to stockholders
E)All the options are correct.

Question

Quizplus · Accepted Answer

Dividend payments to stockholders are not a source of liquidity for financial institutions as they involve a cash outflow from the institution, reducing its liquidity. The other options- deposits, money market borrowings, and sale of marketable securities- provide inflows of cash for financial institutions, increasing their liquidity. Therefore, option D is the correct answer.

Which of the Following Is Not a Source of Liquidity