ACI
3I0-012 · Question #302
All other things being equal, if a bank borrows short and lends long what is the effect on the liquidity risk of the bank?
The correct answer is C. negative. See the full explanation below for the reasoning.
Question
All other things being equal, if a bank borrows short and lends long what is the effect on the liquidity risk of the bank?
Options
- Apositive
- Bchanges only when interest rates levels are high
- Cnegative
- Dchanges only when interest rates levels are low
How the community answered
(36 responses)- A17% (6)
- B6% (2)
- C75% (27)
- D3% (1)
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