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Which of the following statements is FALSE? A. Financing requirement is the financing gap minus the liquid assets. B. A positive financing gap implies that

Which of the following statements is FALSE?

A.

Financing requirement is the financing gap minus the liquid assets.

B.

A positive financing gap implies that the bank must borrow funds or rely on liquid assets to fund the non-liquid assets.

C.

A liquidity plan requires forward planning so that an optimal mix of funding can be implemented to reduce costs and unforeseen withdrawals.

D.

The lower is the liquidity index, the less liquidity the bank has on its balance sheet.

E.

A rising financing gap on a daily basis over a period of time may indicate future liquidity problems due to increased deposit withdrawals and/or increased exercise of loan commitments.

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