If the bank experiences a $50,000 sudden liquidity drain caused by a loan commitment draw down,what will be the impact on the balance sheet if stored liquidity management techniques are used?
A) A reduction in cash of $21,000 and an increase in demand deposits of $29,000.
B) A reduction in securities and/or current loans totaling $50,000.
C) A reduction in cash of $21,000 and a decrease in securities holdings of $29,000.
D) A decrease in equity of $50,000.
Correct Answer:
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