A Depository Institution Can Make Highly Illiquid and Long-Maturity Loans

Multiple Choice

A depository institution can make highly illiquid and long-maturity loans with funds obtained by issuing transaction deposits because

A) depository institutions tend to be owned by individuals with a high tolerance of risk.
B) most transaction depositors have very transaction patterns.
C) depositors, taken as a group, behave in a predictable manner.
D) depository institutions are skilled at evaluating credit risks.
E) depository institutions have a large pool of assets to draw from.