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QUESTION 17 (Bonus Questions). Which of the following statements is NOT correct? (Hint: This question relates to Chapter 12 Liquidity Risk). A. If the amount

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QUESTION 17 (Bonus Questions). Which of the following statements is NOT correct? (Hint: This question relates to Chapter 12 Liquidity Risk). A. If the amount of average deposits and the amount of liquid assets stay unchanged, then an FI would need more borrowed funds when the average deposit decreases B. When a financial institution provides loan commitment to a firm, it is exposed to liquidity risk from the asset side C. When a financial institution holds an investment portfolio, it is exposed to liquidity risk from the asset side D. For a healthy bank, it should expect an average of positive net deposit drain such that new deposit funds more than offset deposit withdrawals. E None of the above

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