Liquidity Risk at a Financial Intermediary (FI)is the Risk

question 14

Multiple Choice

Liquidity risk at a financial intermediary (FI) is the risk

• A)that promised cash flows from loans and securities held by FIs may not be paid in full.
• B)incurred by an FI when the maturities of its assets and liabilities do not match.
• C)that a sudden surge in liability withdrawals may require an FI to liquidate assets quickly at fire sale prices.
• D)incurred by an FI when its investments in technology do not result in cost savings or revenue growth.
• E)risk that an FI may not have enough capital to offset a sudden decline in the value of its assets.

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Definitions:

Interpersonal Conflict Management

The process of identifying and handling conflicts in a constructive manner between individuals.

Pooled Interdependence

A work scenario where different departments or groups contribute independently to a common outcome.

Reciprocal Interdependence

A mutual reliance among members of a group, organization, or system where the actions of one entity directly affect the outcomes of others.

Conflict

A situation or process where individuals, groups, or entities have opposing interests, views, or goals, leading to tension or disputes.