Which of the following refers to the risk most associated with a shortage of cash?
A)interest rate risk
B)liquidity risk
C)exchange rate risk
D)credit risk

Question

Quizplus · Accepted Answer

Liquidity risk refers to the risk of not being able to convert assets into cash quickly enough to meet financial obligations. A shortage of cash would directly result in liquidity risk. Interest rate risk refers to the risk of interest rate fluctuations affecting the value of assets or liabilities, exchange rate risk refers to the risk of currency exchange rate fluctuations affecting financial performance, and credit risk refers to the risk of default by borrowers or counterparties.

Which of the Following Refers to the Risk Most Associated