Question 1

What are typical reasons for abnormal deposit drains?

Accepted Answer

A) Concerns about an FI's solvency relative to other FIs. 
B) Failure of a related FI leading to heightened depositor concerns about the solvency of other FIs. 
C) Sudden changes in investor preferences regarding holding non-bank financial assets relative to deposits. 
D) All of the listed options are correct. 
A) Concerns about an FI's solvency relative to other FIs. 
B) Failure of a related FI leading to heightened depositor concerns about the solvency of other FIs. 
C) Sudden changes in investor preferences regarding holding non-bank financial assets relative to deposits. 
D) All of the listed options are correct.

Question 2

Trend liquidity needs are liquidity needs that relate to the:

Accepted Answer

A) trends occurring in the community where, for example, loan growth exceeds deposits growth. 
B) trends occurring in the community where, for example, deposit growth exceeds loan growth. 
C) demand for liquidity that fluctuates with seasonal factors. 
D) demand for liquidity that fluctuates with seasonal factors within a community. 
A) trends occurring in the community where, for example, loan growth exceeds deposits growth. 
B) trends occurring in the community where, for example, deposit growth exceeds loan growth. 
C) demand for liquidity that fluctuates with seasonal factors. 
D) demand for liquidity that fluctuates with seasonal factors within a community.

Question 3

Distinguish between liquidity risk arising from the asset-side and the liability-side of the balance sheet.

Accepted Answer

Liquidity risk occurs because of situati

Question 4

Which of the following statements is false?

Accepted Answer

A) It is difficult to isolate which part of past deposits and loan fluctuations is due to cyclical liquidity. 
B) Forecasting future liquidity needs based on past patterns is always risky due to changes in seasonal patterns, regulation and economic conditions. 
C) Liquidity planning tools typically ignore cyclical liquidity needs and liquidity needs due to FI confidence crises. 
D) None of the listed options are correct. 
A) It is difficult to isolate which part of past deposits and loan fluctuations is due to cyclical liquidity. 
B) Forecasting future liquidity needs based on past patterns is always risky due to changes in seasonal patterns, regulation and economic conditions. 
C) Liquidity planning tools typically ignore cyclical liquidity needs and liquidity needs due to FI confidence crises. 
D) None of the listed options are correct.

Question 5

Which of the following statements is true?

Accepted Answer

A) The liquidity index compares the liquidity of a single institution with the industry average and thus measures the liquidity risk of that particular institution. 
B) The liquidity index provides guidance for FIs on how much liquidity they should hold on a seasonal basis. 
C) The liquidity index measures the potential losses an FI could suffer if new market entrants take away market share from the existing institutions. 
D) The liquidity index measures the potential losses an FI could suffer from a sudden disposal of assets compared to the mount it would receive at a fair market value established under normal sales conditions. 
A) The liquidity index compares the liquidity of a single institution with the industry average and thus measures the liquidity risk of that particular institution. 
B) The liquidity index provides guidance for FIs on how much liquidity they should hold on a seasonal basis. 
C) The liquidity index measures the potential losses an FI could suffer if new market entrants take away market share from the existing institutions. 
D) The liquidity index measures the potential losses an FI could suffer from a sudden disposal of assets compared to the mount it would receive at a fair market value established under normal sales conditions.

What are typical reasons for abnormal deposit drains?

Trend liquidity needs are liquidity needs that relate to the:

Distinguish between liquidity risk arising from the asset-side and the liability-side of the balance sheet.

Which of the following statements is false?

Which of the following statements is true?

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

The Financial Services Industry: Other Financial Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: The Duration Model

Managing Interest Rate Risk Using Off Balance Sheet Instruments

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Technology and Other Operational Risk

Capital Management and Adequacy

Filters

Exam 14: Liquidity Risk

What are typical reasons for abnormal deposit drains?

Trend liquidity needs are liquidity needs that relate to the:

Distinguish between liquidity risk arising from the asset-side and the liability-side of the balance sheet.

Which of the following statements is false?

Which of the following statements is true?

Why Are Financial Institutions Special

The Financial Services Industry: Depository Institutions

The Financial Services Industry: Other Financial Institutions

Risk of Financial Institutions

Interest Rate Risk Measurement: The Repricing Model

Interest Rate Risk Measurement: The Duration Model

Managing Interest Rate Risk Using Off Balance Sheet Instruments

Credit Risk I: Individual Loan Risk

Market Risk

Credit Risk I: Individual Loan Risk

Credit Risk II: Loan Portfolio and Concentration Risk

Sovereign Risk

Foreign Exchange Risk

Liability and Liquidity Management

Off-Balance-Sheet Activities

Technology and Other Operational Risk

Capital Management and Adequacy

Filters