A bank has borrowed in the Federal Funds Market and is unsure whether it has the cash to

pay back the loan. This is an example of:

a$)$ Asset$-$side liquidity risk

b$)$ Liability$-$side liquidity risk

c$)$ Either a$)$ or b$)$ could be true

Note: For questions $7-10$ I am giving you the bank's entire balance sheet except for the value of

its equity.

A bank has $$50$ in cash, $$50$ in loans and $$99$ in deposits. True or False: The bank is facing

high:

a$)$ Solvency risk

b$)$ Liquidity Risk

c$)$ Both Solvency and Liquidity risk

d$)$ Neither Solvency nor Liquidity risk

A bank has $$2$ in cash, $$98$ in loans and $$99$ in deposits. True or False: The bank is facing high:

a$)$ Solvency risk

b$)$ Liquidity Risk

c$)$ Both Solvency and Liquidity risk

d$)$ Neither Solvency nor Liquidity risk

A bank has $$50$ in cash, $$50$ in loans and $$60$ in deposits. True or False: The bank is facing

high:

a$)$ Solvency risk

b$)$ Liquidity Risk

c$)$ Both Solvency and Liquidity risk

d$)$ Neither Solvency nor Liquidity risk

A bank has $$2$ in cash, $$98$ in loans and $$50$ in deposits. True or False: The bank is facing

high:

a$)$ Solvency risk

b$)$ Liquidity Risk

c$)$ Both Solvency and Liquidity risk

d$)$ Neither Solvency nor Liquidity risk