Multiple Choice
Which of the following statements is true in the context of the liquidity index?
A) The greater the difference between immediate fire-sale asset prices and fair market value prices, the more liquid is the FI's portfolio of assets.
B) The greater the difference between immediate fire-sale asset prices and fair market value prices, the less liquid is the FI's portfolio of assets.
C) The smaller the difference between immediate fire-sale asset prices and fair market value prices, the less liquid is the FI's portfolio of assets.
D) None of the listed options are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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