Which of the following statements is/are true? Multiple statements may be true A bank borrowing from the central bank signals confidence to other market participants The risk of fire sale is decreasing in the underlying item's illiquidity Liquidity risk can be addressed using off-balance sheet items Liquidity risk can originate from off-balance sheet items

Which of the following statements is/are true? Multiple statements may be true A bank borrowing from the central bank signals confidence to other market participants The risk of fire sale is decreasing in the underlying item's illiquidity Liquidity risk can be addressed using off-balance sheet items Liquidity risk can originate from off-balance sheet items

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter11: Auditing Inventory, Goods And Services, And Accounts Payable: The Acquisition And Payment Cycle

Section: Chapter Questions

Problem 7CYBK

See similar textbooks

Similar questions

Changes in interest rates may change the market values of the bank's assets and liabilities by different amounts is a Select one: O a. Spread Risk O b. Refinancing risk O c. Reinvestment risk Od. Price Risk
Which one of the following statements is FALSE? Select one: O a. Holding more liquid funds will reduce the liquidity risk faced by a bank. O b. An increase in the yield of non-liquid assets is likely to increase holdings of liquid assets O c. Loans from short-term money market dealers are classified as purchased liquidity Od. Higher liquidation costs of non-liquid assets encourage a bank to hold more liquid assets
Banks use gap analysis to measure interest rate risk in their balance sheets. If firm XYZ is said to have a positive gap, this means: Group of answer choices C. Rate-sensitive assets exceed rate-sensitive liabilities B. Long-term assets are funded with short-term liabilities D. Rate-sensitive assets equal rate-sensitive liabilities A. Liabilities reprice before assets
1. This refers to the funds that are tied up in transit or in the banking system 2. A type of risk where the issuer of the security will not pay interest or principal
Which of the following statements is false? A. Funding risk is the risk that a firm will not be able to meet its (short-term) financial obligations when due. B. Banks have high levels of liquidity assets and stable funding since the financial crisis. C. Basel II employ the value at risk (VaR) to measure credit risk and operational risk. D. The covariance cannot be measured in units.
Which one of the following is not a money market instrument? A. Treasury bill B. Negotiable certificate of deposit C. Commercial paper D. Treasury bond E. Eurodollar account Please explain all points without plagiarism Upvote ?sure
Financial markets are often subject to asymmetric information problems. There are two types of asymmetric information problems depending on the timing the information asymmetry affects transactions. Explain the two types of asymmetric information problems and explain why the existence of information asymmetry causes problems in financial markets
Having longer-maturity assets than liabilities causes banks to bear which of the following risks? I. Interest rate risk II. Liquidity risk III. Credit risk a. I only b. I and II only c. I and III only d. II and III only e. I, II, and III Clear my choice
Match the risk with the correct transaction (if any): v The DC appreciates, altering relative prices in the current account A. Risk from translation to the FC firm with DC operations v The DC depreciates, altering relative prices in the current account B. Risk to the seller of goods to the FC buyers v The DC depreciates, altering relative prices in the financial account C. Risk to the foreign investor invested domestically v The DC appreciates, altering relative prices in the financial account D. Risk to the buyer of inputs from FC firms v The DC appreciates, altering the spot FX rate E. RIsk form translation to the DC firm with FC operations F. Risk to the investor invested abroad
Which of the following has caused banks difficulty in estimating liquidity needs?A. competition for loans from other financial institutionsB. deregulation of interest rate ceilings on depositsC. competition for loans from nonfinancial institutionsD. a, b, and c
The deterioration of economic conditions; deterioration of the value of the local currency in terms of the bank’s base currency; convertibility or transfer risks; market crisis are examples of what kinds of risk? Select one: a. Solvency risk b. Foreign exchange risk c. Sovereign risk d. Credit risk
A lockbox plan is A. A method for safe-keeping of marketable securities. B. Used to identify inventory safety stocks. C. A system for slowing down the collection of checks written by a firm. D. A system for speeding up a firm?s collections of checks received. E. Not described by any of the statements above.