In addition to uncertainty about the timing and amount of the cash outlays, and the potential for the depositor or policyholder to withdraw cash early or borrow against a policy, a financial institution has to be concerned with possible reduction in cash inflows.

Question

Quizplus · Accepted Answer

Uncertainty about cash inflows is a valid concern for financial institutions because depositors or policyholders may withdraw funds early or not make their payments on time. This can result in a reduction in the amount of cash that a financial institution has on hand, which can impact its ability to meet its financial obligations.

In Addition to Uncertainty About the Timing and Amount of the Cash