Scenario Analysis Refers to the Part of a Bank's Liquidity

question 27

Multiple Choice

Scenario analysis refers to the part of a bank's liquidity policy that caters for:

• A)a range of predictable events, to ensure that the FI can operate under these operating conditions
• B)worst-case events only, to ensure how worst-case events affect the FI's operating conditions
• C)the most likely scenario, to ensure that the FI's liquidity policy is still valid
• D)a range of specific events, to ensure that the FI can operate under a wide spectrum of operating conditions

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Definitions:

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Dissociative Disorders

A group of mental disorders characterized by a disconnection and lack of continuity between thoughts, memories, surroundings, actions, and identity.

Schizophrenia

A chronic and severe mental disorder that affects how a person thinks, feels, and behaves, characterized by delusions, hallucinations, and disordered thinking.

Anxiety Disorders

A group of mental health disorders characterized by significant feelings of anxiety and fear, impacting daily functioning.