Which of the following statements is true?

A.

The stock of liquid assets held in an FI's balance sheet will depend on the FI's willingness to trade off liquidity against returns and on its ability to issue more loans.

B.

The stock of liquid assets held in an FI's balance sheet will not depend on the FI's willingness to trade off liquidity against capital, it will depend, however, on its ability to borrow.

C.

The stock of liquid assets held in an FI's balance sheet will depend on the FI's willingness to trade off liquidity against returns but not on its ability to issue more loans.

D.

None of the listed options is correct.

E.

The stock of liquid assets held in an FI's balance sheet will neither depend on the FI's willingness to trade off liquidity against returns, but on its ability to initiate fire sale.