20-27 Market value accounting is likely to increase the variability of earnings of an FI.

Name: 20-27 Market value accounting is likely to increase the variability of earnings of an FI.
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Question

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Market value accounting can lead to increased variability in earnings as the values of assets and liabilities are marked to market, which means they can fluctuate based on market conditions. This can result in higher gains or losses being recognized in the income statement, leading to greater variability in earnings.

20-27 Market Value Accounting Is Likely to Increase the Variability