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2.4 Financial markets and monetary policy (A-level only)

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Question 59

Commercial banks must manage the inherent conflict between liquidity, profitability, and security. To optimize its balance sheet under regulatory oversight, a commercial bank ranks its assets. Which one of the following correctly lists these assets in order from least liquid to most liquid?

A

Overnight deposits at the Bank of England →\rightarrow→ Treasury bills →\rightarrow→ Government bonds (Gilts) →\rightarrow→ Advances to customers

B

Advances to customers →\rightarrow→ Government bonds (Gilts) →\rightarrow→ Treasury bills →\rightarrow→ Overnight deposits at the Bank of England

C

Government bonds (Gilts) →\rightarrow→ Advances to customers →\rightarrow→ Treasury bills →\rightarrow→ Overnight deposits at the Bank of England

D

Advances to customers →\rightarrow→ Treasury bills →\rightarrow→ Government bonds (Gilts) →\rightarrow→ Overnight deposits at the Bank of England

Markscheme

2.4 Financial markets and monetary policy (A-level only) Questions

  1. A Level
  2. /Economics
  3. /2.4 Financial markets and monetary policy (A-level only)

176 exam-style questions on AQA A Level Economics 2.4 Financial markets and monetary policy (A-level only), covering 2.4.1 The structure of financial markets and financial assets, 2.4.2 Commercial banks and investment banks, 2.4.3 Central banks and monetary policy, and 2.4.4 The regulation of the financial system. Each one has a worked solution and a mark scheme showing where the marks go.

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