Consider the following hypothetical data: $$\begin{array} { | l | l | }
\hline \text { Sources of liquidity } & \
\hline \text { Total cash-type assets } & \$ 3000 \
\hline \text { Maximum borrowed funds limit } & \$ 22000 \
\hline \text { Excess cash in exchange settlement account (ESA) } & \$ 1000 \
\hline & \
\hline \text { Uses of liquidity } & \
\hline \text { Funds borrowed } & \$ 12500 \
\hline \text { ESAfunds } & \$ 500 \
\hline
\end{array}$$ What is the FI's net liquidity position?
A)($12 500 + $500) - ($3000 + $22 000 + $1000) = -$13 000
B)($3000 + $22 000 + $1000) - ($12 500 + $500) = $13 000
C)($12 500 - $500) = $13 000
D)($3000 + $22 000 + $1000) = $26 000

Question

Consider the following hypothetical data: $$\begin{array} { | l | l | } 
\hline \text { Sources of liquidity } & \
\hline \text { Total cash-type assets } & \$ 3000 \
\hline \text { Maximum borrowed funds limit } & \$ 22000 \
\hline \text { Excess cash in exchange settlement account (ESA) } & \$ 1000 \
\hline & \
\hline \text { Uses of liquidity } & \
\hline \text { Funds borrowed } & \$ 12500 \
\hline \text { ESAfunds } & \$ 500 \
\hline
\end{array}$$ What is the FI's net liquidity position?
A)($12 500 + $500) - ($3000 + $22 000 + $1000) = -$13 000
B)($3000 + $22 000 + $1000) - ($12 500 + $500) = $13 000
C)($12 500 - $500) = $13 000
D)($3000 + $22 000 + $1000) = $26 000

Quizplus · Accepted Answer

To calculate the net liquidity position, we need to subtract the total uses of liquidity (i.e. borrowed funds and ESA funds) from the total sources of liquidity (i.e. cash-type assets, maximum borrowed funds limit, and excess cash in ESA). Therefore, the calculation would be: ($3000 + $22 000 + $1000) - ($12 500 + $500) = $13 000. Option B is the correct answer.

Consider the Following Hypothetical Data What Is the FI's Net Liquidity Position? A)($12 500

Consider the Following Hypothetical Data What Is the FI's Net Liquidity Position?
A)($12 500