Commercial banks must carefully manage the trade-off between the security of their assets, their profitability, and their liquidity. To support this objective, banks maintain a portfolio containing various categories of assets.
Which one of the following correctly lists these assets in order from most liquid to least liquid?
Cash and reserves at the Central Bank →\rightarrow→ Treasury bills →\rightarrow→ Government securities →\rightarrow→ Advances to customers
Treasury bills →\rightarrow→ Cash and reserves at the Central Bank →\rightarrow→ Advances to customers →\rightarrow→ Government securities
Government securities →\rightarrow→ Advances to customers →\rightarrow→ Cash and reserves at the Central Bank →\rightarrow→ Treasury bills
Advances to customers →\rightarrow→ Government securities →\rightarrow→ Treasury bills →\rightarrow→ Cash and reserves at the Central Bank
