Assuming normal financial and economic conditions, what are the main advantages of a central bank maintaining low-risk, short-term assets on its balance sheet? Instructions: Choose all that apply:

A. By reducing riskiness of its portfolio in normal times, the Fed maximizes the ability to counter threats to stability when they arise.

B. Holding short-term Treasury debt counters the criticism that the Fed interferes in fiscal policy, overstepping its mandate.

C. A low-risk portfolio removes the Fed from interference in the market determination of liquidity and maturity risk premia.

D. By holding low-risk, short maturity Treasuries, the Fed is able to earn high returns to fund operations.

E. The Fed is able to financially support industries that are critical to economic stability.