10Depository institutions seek to generate income by:

1. The difference between the return that they earn on assets and the cost of their funds.
2. Selling money for more than it costs to buy money.
3. The bid-ask spread.
4. a and b only.
5. None of the above.

11. A fixed-rate deposit represents what type of liability to a financial institution?

1. Type I liability.
2. Type II liability.
3. Type III liability.
4. Type IV liability.
5. None of the above.

12. Which of the following is true concerning a Type-II liability?

1. Amount and timing of cash outlay are known.
2. Amount and timing of cash outlay are unknown.
3. Amount of cash outlay is known while timing of cash outlay is unknown.
4. Amount of cash outlay is unknown while timing of cash outlay is known.
5. None of the above.