A disadvantage of using asset management to manage an FI's liquidity risk is:
A)the resulting shrinkage of the FI's balance sheet
B)the high cost of purchased liabilities
C)the accessibility of international money markets
D)loss of flexibility as a result of dependence upon purchased liabilities

Question

Quizplus · Accepted Answer

Using asset management to manage liquidity risk can lead to a reduction in the size of the financial institution's balance sheet, as assets may need to be sold to meet liquidity needs.

A Disadvantage of Using Asset Management to Manage an FI's