金融市场与金融机构基础(第3章)英文版答案..docVIP

ANSWERS TO QUESTIONS FOR CHAPTER 3 (Questions are in bold print followed by answers.) 1. Explain the ways in which a depository institution can accommodate withdrawal and loan demand. A depository institution can accommodate loan and withdrawal demands first by having sufficient cash on hand. In addition it can attract more deposits, borrow from the Fed or other banks, and liquidate some of its other assets. 2. Why do you think a debt instrument whose interest rate is changed periodically based on some market interest rate would be more suitable for a depository institution than a lon