Which of the following statements is/are TRUE?

Select one or more:

a. FIs such as depository institutions are exposed to liquidity risk because the relatively illiquid nature of their liabilities.

b. A liquid asset converts to cash quickly, but will require a discount from market value.

c. Excessive illiquidity can cause an FI's inability to meet required payments on liability claims and, at the extreme, in insolvency.

d. When trying to reduce the risk of a liquidity crisis for an FI, one approach is to efficiently manage liquid asset positions.