1. How does an ADI estimate its future need for liquidity? How does it decide how to meet those future liquidity needs? What factors will influence the sources of liquidity that it chooses?
2. Explain why ADIs invest in securities, describe the typical hierarchy of priorities when deciding which assets to invest in, and explain why this might result in buying and selling securities at the wrong time in the economic cycle.
3. Describe the different corporate borrowers an ADI is likely lend to, and the different types of commercial loans it is likely to make.