The Risk That an FI May Not Have Enough Capital

question 126

Multiple Choice

The risk that an FI may not have enough capital to offset a sudden decline in the value of its assets relative to its liabilities is referred to as

• A)currency risk.
• B)sovereign risk.
• C)insolvency risk.
• D)liquidity risk.
• E)interest rate risk.

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Definitions:

Evolutionary Trend

A general direction of adaptive changes or evolutionary developments in a group over time.

Mesozoic Era

A geological era occurring between 252 to 66 million years ago, known as the age of reptiles, including dinosaurs.

Cycads

Ancient group of seed plants with a palm-like appearance, found in tropical and subtropical regions.

Ferns

Non-flowering vascular plants that reproduce via spores and possess fronds, common in moist, shady environments.