Which of the following is false?
A)FIs use diversification and expert credit analysis to manage credit risk.
B)FIs use adjustable rate loans, forwards, futures, options, swaps, and securitizations to manage interest rate risk.
C)Liquidity risk is managed by the ability to borrow funds.
D)Exchange rate risk is managed by the ability to borrow funds at a fixed exchange rate.

Question

Quizplus · Accepted Answer

Exchange rate risk is not managed by the ability to borrow funds at a fixed exchange rate. Instead, exchange rate risk can be managed through the use of currency derivatives such as forwards, futures, options, and swaps.

Which of the Following Is False