Which of the following is an option when a liquidity deficit arises and a bank wants to use stored liquidity in its assets to cover the deficit?
A)Borrowing in the Federal Funds market
B)Issuing a jumbo CD
C)Selling Treasury Bills
D)Increasing their correspondent deposits with another bank
E)All the options are correct

Question

Quizplus · Accepted Answer

Selling Treasury Bills is a way for a bank to convert its stored liquidity (in the form of assets) into cash to cover a liquidity deficit.

Which of the Following Is an Option When a Liquidity