Banking Liquidity Management Quiz

Funds set aside for long-term investments

Assets used to meet the bank’s obligations to shareholders

Insurance against the costs associated with deposit outflows (correct)

Cash kept on hand for daily transactions

To increase liquidity management efficiency

To attract more depositors

To invest in riskier assets

To mitigate the impact of potential deposit outflows (correct)

To minimize the number of deposit outflows

To maximize profits from excess reserves

To invest in long-term assets

To acquire sufficiently liquid assets to meet the bank’s obligations to depositors (correct)