Relying on liquid assets to meet liquidity requirements is ______ than relying on liability management, but the former is ______.

Question

Quizplus · Accepted Answer

Relying on liquid assets to meet liquidity requirements is considered safer because liquid assets can be quickly converted into cash to meet immediate demands without significant loss. However, this approach is less profitable than liability management because liquid assets typically yield lower returns compared to investments that might be made with funds obtained through borrowing or other liability management techniques.

Relying on Liquid Assets to Meet Liquidity Requirements Is ______