Heavy risk exposure due to short-term borrowing can be compensated for by carrying more illiquid assets.

Name: Heavy risk exposure due to short-term borrowing can be compensated for by carrying more illiquid assets.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Carrying more illiquid assets does not compensate for heavy risk exposure due to short-term borrowing; instead, it can exacerbate liquidity risks because illiquid assets are difficult to convert into cash quickly without significant loss in value.

Heavy Risk Exposure Due to Short-Term Borrowing Can Be Compensated