Assume that you are the senior manager of a leading commercial bank in Oman. You are aware that there are no capital controls in Oman and that Omani Rial is pegged against the dollar. Your past experience tells you that while is some weeks your bank has surplus liquidity, in other weeks there are deficits. You are trying to decide whether to use an Asset Conversion Strategy or a

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter23: Other Topics In Working Capital Management
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Assume that you are the senior manager of a leading commercial bank in Oman. You are aware that there are no capital controls in Oman and that Omani Rial is pegged against the dollar. Your past experience tells you that while is some weeks your bank has surplus liquidity, in other weeks there are deficits. You are trying to decide whether to use an Asset Conversion Strategy or a Borrowed Liquidity Strategy in managing your bank's liquidity position. Which of these two strategies, would you prefer and why ?

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