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Card 8 / 40: Liquidity risk is the risk
A)
that day to day withdrawals and loan demands will no longer be predictable
B)
that a sudden increase in withdrawals or loan demand may require an FI to liquidate assets in a short period and at low prices
C)
incurred by FI when the maturities of its assets and liabilities are mismatched and interest rates are volatile
Answer:
B) that a sudden increase in withdrawals or loan demand may require an FI to liquidate assets in a short period and at low prices
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