Funding Liquidity Risk Is the Risk That the Financial Institution

question 40

True/False

Funding liquidity risk is the risk that the financial institution will be unable to obtain funding to obtain cash flow necessary to satisfy its obligations.

---

Definitions:

Supply Equation

A mathematical expression that shows the relationship between the quantity of a good that producers are willing to sell and factors that influence this quantity, such as price.

Price Floor

A government or group-imposed price control that sets the lowest legal price a commodity can be sold at. It is used to ensure producers receive a minimum price often in agriculture.

Shortage/Surplus

Shortage occurs when demand exceeds supply, while surplus occurs when supply exceeds demand.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a market.