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Question
Holdings of U.S. Treasury securities are classified on a DI's balance sheet as
A. assets, because U.S. Treasury securities are default risk-free.
B. liabilities, because the DI must pay cash in order to acquire the securities.
C. assets, because securities holdings represent a use of funds for investment.
D. liabilities, because the Treasury securities must be pledged as collateral against discount window borrowing.
E. assets, because the market for U.S. Treasury securities is the most liquid in the world.
Answer
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