Explanation:
The bank's net liquidity position is calculated by summing up all the cash inflows and outflows for the week. According to the provided data:
Adding these amounts together gives us the net liquidity position:
million USD
Thus, the correct answer is C, which indicates a net liquidity position of 40 million USD at the week's end. This calculation is based on the principle that inflows are positive and outflows are negative, and the sum of these values reflects the bank's liquidity status.
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A treasurer at a small regional bank needs to assess the bank's liquidity position for the upcoming week. The treasurer forecasts various cash inflows and outflows during this period, as detailed in the table below:
| Cash Flows | Amount (USD million) |
|---|---|
| Deposit withdrawals | 30 |
| Deposit inflows | 70 |
| Scheduled loan repayments | 80 |
| Acceptable loan requests | 50 |
| Borrowings from money market | 60 |
| Operating expenses | 40 |
| Stockholder dividend payments | 20 |
| Repayment of bank borrowings | 30 |
Based on these projections, what will be the bank's net liquidity position (in millions of USD) at the end of the week?
A
-80
B
-20
C
40
D
100
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