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What is the difference between solvency and liquidity for a bank? A. A solvent bank has a positive net worth while a bank with liquidity
What is the difference between solvency and liquidity for a bank?
A. A solvent bank has a positive net worth while a bank with liquidity means that the bank has sufficient reserves and immediately marketable assets to meet withdrawal demands.
B. Solvency means that the bank has enough cash on hand to meet withdrawal requests while liquidity means that the bank has access to enough cash to meet withdrawal requests within a specified time period.
C. Solvency is enough to stop a bank run, but liquidity is not.
D. Nothing. These are different words for the same concept.
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