When an individual has immediate access to their funds from an account with a financial intermediary,the intermediary is engaging in:
A) asset transformation.
B) liability management.
C) liquidity management.
D) credit transformation.

Question

Quizplus · Accepted Answer

When a financial intermediary provides immediate access to funds, it is ensuring that it has adequate liquidity management to meet the needs of its customers. This involves managing the availability of funds to meet customer demands while maintaining the health of the financial institution. Asset transformation refers to the process of converting less liquid assets into more liquid ones. Liability management is the practice of managing a financial institution's liabilities to ensure that it has sufficient funds to meet its financial obligations. Credit transformation refers to the process of changing the risk characteristics of a financial asset.

When an Individual Has Immediate Access to Their Funds from an Account