You have to answer all the questions which are in the pdf file. The answer should be very specific and to the point

Activity Questions Weeks 9 & 10 Cash Flow and Liquidity Risk Management Question 1 What is liquidity risk? Question 2 Answer each of the following questions (a) What are the primary reasons why liquidity risk arises? (b) How does liquidity risk arising from the liability side of the balance sheet differ from liquidity risk arising from the asset side of the balance sheet? Question 3 Differentiate between market (or transactional) liquidity and funding (or liability) liquidity risk. Question 4 Refer to the Reading by Erik Banks. Identify and explain why various types of off balance sheet activities can result in liquidity risk? Question 5 Differentiate between the primary sources of liquidity risk for a bank as opposed to a corporate. Question 6 In relation to bank deposits (a) What is a bank run? (b) What are some possible withdrawal shocks that could initiate a bank run? (c) What feature of the demand deposit contract provides deposit withdrawal momentum that can result in a bank run? Question 7 What is the cash conversion cycle and how can it create liquidity risk? Question 8 Refer to the paper by LaCava, G. & Windsor, C., (2016): (a) Identify three theories that explain as to why firm's hold cash. How are they related to the financial frictions and the agency costs hypotheses? (b) Using the summary statistics in table 2 on page 14 discuss the differences in cash holding between public and private companies. (c) The trend increase in cash holdings of public companies over recent decades is largely explained by changes in which observable company characteristics? Question 9 Discuss the limitations of using liquidity ratios to measure Liquidity risk Question 10 Explain with the use of an example how the Miller-Orr model can be used to manage liquidity risk in a corporate in the case of surplus cash or a cash shortfall. Question 11 Differentiate between the following forms of short term borrowing? (a) Commercial paper (b) Compensating balance loan (b) Bank overdraft (c) Bank bill facility (d) Accounts receivable loan (e) Inventory loan Question 12 Identify and explain how pooling can be used to manage cash within a corporate operating in numerous international locations Question 13 In relation to cash flow gaps: (a) explain the primary cash inflows and outflows (b) explain the concept of a net funding requirement (c) discuss how the net funding requirement can be used to assess liquidity risk. Question 14 Identify the primary approaches that can be used by a corporate to measure and manage liquidity risk. Group Activity Questions (Discuss with your other group members) Question 15 Identify issues that you will need to consider in managing liquidity risk if you were the corporate treasurer of one of the following firms: - CSR Ltd JB HiFi Ltd