The primary advantage(s) of liability management include:
A) assets can be shifted from lower earning money market instruments to higher earning loans and longer-term securities
B) increased risk
C) greater asset diversification is possible
D) a and c
E) a, b, and c

Question

Quizplus · Accepted Answer

Liability management allows banks to shift assets to higher earning opportunities and diversify their asset portfolios, enhancing returns and spreading risk. Increased risk is not an advantage but a potential consequence.

The Primary Advantage(s) of Liability Management Include