A DI has $ 10 million in T-bills, a $ 5 million line of credit to borrow in the repo market, and $ 5 million in excess cash reserves (above reserve requirements) with the Fed. The DI currently has borrowed $ 6 million in fed funds and $ 2 million from the Fed discount window to meet seasonal demands.
a. What is the DI’s total available (sources of) liquidity?
b. What is the DI’s current total uses of liquidity?
c. What is the net liquidity of the DI?
d. What conclusions can you derive from the result?

  • CreatedJanuary 27, 2015
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