14. List the following monetary policy tools from most frequently used to least frequently used by the Federal Open Market Committee (FOMC)?

1. Required Reserve Ratio
2. Discount Rate
3. Open Market Operation

15. If an international bank attempts to reduce its foreign currency exposure by replacing long-term foreign government securities with domestic floating-rate commercial loans, it is likely that the bank's:

a. default risk would decrease and liquidity risk would decrease

b. default risk would increase and liquidity risk would increase

c. default risk would increase and liquidity risk would decrease

d. default risk would decrease and liquidity risk would increase

16. What will result if long term investment securities are replaced with more floating rate loans?

1. default risk would increase.
2. liquidity risk would increase.
3. Both A and B
4. None of the above