Which of the following situations pose a refinancing risk for an FI?
A) An FI issues $10 million of liabilities of one-year maturity to finance the purchase of $10 million of assets with a two-year maturity.
B) An FI issues $10 million of liabilities of two-year maturity to finance the purchase of $10 million of assets with a two-year maturity.
C) An FI issues $10 million of liabilities of three-year maturity to finance the purchase of $10 million of assets with a two-year maturity.
D) An FI matches the maturity of its assets and liabilities.
Correct Answer:
Verified
Q91: The potential exercise of unanticipated contingencies can
Q96: A small local bank failed because a
Q97: The risk that a debt security's price
Q99: "Matching the book" or trying to match
Q103: The risk that an FI may not
Q104: This risk of default is associated with
Q105: When the U.S.dollar declines against European currencies,it
Q106: A U.S.bank has €40 million in assets
Q107: Which of the following refers to an
Q119: Which of the following observations is NOT
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents