Question: Liquidity planning requires monitoring deposit outflows In each of the

Liquidity planning requires monitoring deposit outflows. In each of the following situations, which of the outflows are discretionary and which are not? If the outflow is not discretionary, is it predictable or unexpected?
a. In April, a farmer draws down his line of credit in order to purchase seed.
b. Students borrow to pay fall tuition.
c. The bank makes a preferred stock dividend payment.
d. A fire destroys a portion of the local business district, and many firms apply for reconstruction loans.
e. The bank pays rent on its offices.
f. On the Friday before the citywide festival, all ATMs in town have been drained of cash.
g. A New York bank has just opened a local banking office and is offering a VCR to anyone who transfers funds from a CD at another bank.
h. The bank buys most of the newly issued local municipal securities.

View Solution:

Sale on SolutionInn
  • CreatedNovember 03, 2015
  • Files Included
Post your question