Why Have Purchased Liquidity Management Techniques Become Very Popular in Spite

Multiple Choice

Why have purchased liquidity management techniques become very popular in spite of its limitations?

A) Because it insulates the assets of an FI from normal drains on liability liquidity.
B) Because funds can be easily raised in the eventuality of a liquidity crunch.
C) Because of decrease in the cost of funds during periods of high interest rate volatility.
D) Because the funds are covered by deposit insurance.
E) Because the adjustment to the deposit drain occurs on the liability side of the balance sheet.