Which Intermediation Function Results in an FI's Exposure to Liquidity

question 92

Multiple Choice

Which intermediation function results in an FI's exposure to liquidity risk?

• A)Information production.
• B)Asset transformation.
• C)Conduit for monetary policy.
• D)Lender of last resort.
• E)Brokering between funds deficit units and funds surplus units.

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Definitions:

Demand Exceeds

A situation where the demand for a product or service surpasses its supply, often leading to stock shortages or increased prices.

No Demand

A market situation where there is no consumer desire or interest in purchasing a specific product or service.

Inconsistency

The state of being inconsistent; lack of uniformity or steadiness in actions, values, or outcomes.

Training

The process of teaching or developing in oneself or others, any skills and knowledge that relate to specific useful competencies.