17-48 Which of the following is NOT a potential causes of liquidity risk for a DI?

Question

Quizplus · Accepted Answer

A decrease in the DI's stock price caused by market factors is not a potential cause of liquidity risk. Liquidity risk refers to the risk of not being able to meet cash flow needs, which can arise due to factors like an increase in loan commitments, a decrease in the availability of short-term funds, or an increase in requests by depositors to withdraw large amounts of deposits. A decrease in the DI's stock price does not directly impact its ability to meet cash flow needs. Similarly, a decrease in asset prices of securities held in the investment portfolio can lead to losses but does not necessarily affect the DI's liquidity position.

17-48 Which of the Following Is NOT a Potential Causes