Which of the following is a condition for a DI to be growing?

Question

Quizplus · Accepted Answer

For a DI to be growing, the average deposit drains should be such that new deposit funds more than offset deposit withdrawals. This means that the net inflow of deposits should be positive i.e., the average deposits must be increasing over time. A net positive drain on deposits (option A) and a decreasing liability side of the balance sheet (option D) indicate a decrease in deposits and, therefore, do not contribute to growth. Option B mentions the peak of the net deposit drain probability distribution, which is not a commonly used indicator for DI growth.

Which of the Following Is a Condition for a DI