In Terms of Liquidity Risk Measurement, the Financing Requirement Is

question 3

Multiple Choice

In terms of liquidity risk measurement, the financing requirement is defined as

• A)total deposits minus core deposits.
• B)financing gap plus liquid assets.
• C)rate sensitive assets minus rate sensitive liabilities.
• D)total assets minus total liabilities.
• E)average loans minus average deposits.

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Definitions:

Perpetuity

An annuity that pays a fixed amount of money for an infinite amount of time.

Amortized

The process of gradually paying off a debt over time in regular installments of interest and principal sufficient to repay the loan fully by its maturity date.

Preferred Stock

A type of stock that typically pays fixed dividends and has priority over common stock in dividend payments and asset liquidation.

Perpetuity

A type of financial annuity that generates an infinite series of equal payments over an indefinable period of time.