Which of the following is not a potential cause of liquidity risk for a DI?
A)a decrease in the DI's stock price caused by market factors
B)an increase in requests to fund large amounts of loan commitments
C)a decrease in the availability of short-term borrowed funds
D)an increase in requests by depositors to withdrawal large amounts of deposits

Question

Quizplus · Accepted Answer

A decrease in the DI's stock price caused by market factors does not directly affect the liquidity of the DI. The other options can lead to an increase in the demand for cash, which may pose liquidity risks.

Which of the Following Is Not a Potential Cause of Liquidity