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:

Risk Of Loss

The legal responsibility for the accidental destruction or deterioration of goods, often determining which party bears the risk during transactions.

Ownership

The state or fact of possessing something, typically property or goods, having legal rights and full control over it.

Bulk Sales

A transaction in which a business sells a significant portion of its inventory to a single buyer, often as a part of liquidation.

Article 6

A specific provision within a legal document or constitution; the context varies depending on the document (e.g., U.S. Constitution's Article 6 establishes federal laws as the supreme law of the land).