Financial Risk Manager Part 2
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First City Bell Bank has forecast its checkable deposits, time and saving deposits, and commercial and household loans over the next six months; aka, semester.
| Month | Checkable Deposits | Time and Savings Deposits | Commercial Loans | Consumer loans |
|-----------|--------------------|---------------------------|------------------|----------------|
| January | 120 | 400 | 500 | 140 |
| February | 110 | 490 | 640 | 220 |
| March | 90 | 490 | 700 | 200 |
| April | 80 | 475 | 710 | 175 |
| May | 95 | 475 | 700 | 150 |
| June | 75 | 480 | 720 | 210 |
If we employ the sources and uses of funds method to estimate the bank's liquidity needs over the semester, which of the following statements is TRUE?
A
During February, sources of liquidity equal zero.
B
During the first quarter (Jan, Feb, March), Acme expects a positive liquidity gap.
C
Over the cumulative six-month semester (Jan through June), Acme expects a positive liquidity gap.
D
During April, sources of $15 partially offset uses of $25 to imply a negative liquidity gap of ten because $15 - $25 = -$10.