A Disadvantage of Using Liability Management to Manage an FI's

question 11

Multiple Choice

A disadvantage of using liability management to manage an FI's liquidity risk is:

• A)the resulting shrinkage of the FI's balance sheet
• B)the high cost of purchased liabilities
• C)the accessibility of international money markets
• D)loss of flexibility as a result of dependence upon purchased liabilities

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Definitions:

Directional Null Hypothesis

A type of null hypothesis that specifies the direction of the difference or association between two variables.

Directional Alternative Hypothesis

Alternative hypothesis that indicates the direction of the change, difference, or relationship.

Non-directional Alternative Hypothesis

A hypothesis that predicts a change in the dependent variable but does not specify the direction of the change.

Non-directional Null Hypothesis

A hypothesis that specifies no expected direction of the observed effect, stating simply that there is no association between the variables under investigation.