Create a severe liquidity crisis for the borrowing firm

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Reference no: EM13890729

1. The Federal funds purchased & repurchase agreements of Washington Mutual Bank declined from 4.1% of assets to .09% of assets between 6/30/2007 and 6/30/2008. True or False?

2. Financial institutions that rely on REPOs are forced to go back to the market regularly to roll over maturing paper. This is a risk to the firm since fear of lenders can create a severe liquidity crisis for the borrowing firm.

True or False?

Reference no: EM13890729

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