a)Rank the following liabilities, with respect to funding risk (a form of liquidity risk), from 1 (Lowest risk) to 4 (Highest risk): Term deposits; Commercial paper; Demand deposits; Interest-bearing cheque accounts(1 mark)

1.

2.

3.

4.

b)Explain how and why a bank's core deposits differ from its volatile liabilities in terms of interest elasticity.(1 mark)