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i) Life insurance companies tend to invest in long-term assets such as loans to shipping companies to build ships. Automobile insurers tend to invest in
i) Life insurance companies tend to invest in long-term assets such as loans to shipping companies to build ships. Automobile insurers tend to invest in short-term assets such as U.S. Treasury bills. What accounts for these differences? ii) Explain why most of the commercial banks are not willing to hold extra cash to manage liquidity risk? iii) Discuss any THREE common ways to solve the immediate liquidity problem in commercial banks.
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