I. Identify the necessity of the Lender of Last Resort status as one of the protective mechanisms that the 'safety net' of the banking system. II. Comment on the following Α. 'The system of keeping a percentage of deposits as bank deposits deposits as reserves creates money, because each euro of reserves creates many euros of demand deposits'. Explain the mechanism or method of creation secondary money by commercial banks. III. Describe the types of risks faced by credit institutions in carrying out their activities. (b) What is the Solvency Ratio of credit institutions and what is the purpose of setting a minimum value for it by by the supervisory authorities? (c) What are the advantages and disadvantages of the Solvency Ratio as currently applied in developed financial institutions? systems? IV. An investor purchased a bond three years ago at par value, i.e. for EUR 1 000. The bond has a maturity of 10 years and an issue interest rate of 10%. The interest is paid annually in one lump sum and compounded annually. Today when interest rates have fallen and new securities with the same characteristics are yielding 8%, its owner wants to sell it.