Disadvantage of maintaining a very high level of liquidity

Reference no: EM131306267

1. Disadvantage of High Liquidity. What is a disadvantage of maintaining a very high level of liquidity?

2. Economic Impact on Liquidity Needs. Assume that your monthly expenses will not change over the next three years, but you expect that the economy will be much weaker in about a year. Explain why you may need more liquidity even if your expenses do not change.

3. Cost of Maintaining More Liquidity. Explain why maintaining more liquidity during a weak economy is costly.

Reference no: EM131306267

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