New financial risk situations result from
A)the changing composition of balance sheets.
B)activities that do not appear on financial statements.
C)overall growth of the financial system relative to the real sector.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

All of the given options can result in new financial risk situations. The changing composition of balance sheets can lead to new types of assets and liabilities that may pose risks to financial institutions. Activities that do not appear on financial statements, such as off-balance-sheet transactions, can result in hidden risks that may not be fully disclosed to investors. The overall growth of the financial system relative to the real sector can also create new and complex risk situations that may not be fully understood by market participants. Therefore, all three options are correct.

New Financial Risk Situations Result from