If a bank wants to shorten its asset duration, what type of risk is the bank concerned about?  Group of answer choices Off balance sheet risk. The risk of rising interest rates. The risk of falling interest rates. Foreign exchange rate risk.

Select all that are true regarding liquidity risk for a bank. Consumer trust in the bank ensures a flow of funds from customers, reducing this risk. O A reduced access to credit markets reduces the bank's liquidity risk. Higher liquidity risk is a result of lower borrowing costs to the bank. O The flow of funds form the bank's clearing of payments reduces this risk. | This risk creates an opportunity cost which could result in a hole in the risk management strategy of the bank. O An increase in the bank's credit rating will help to reduce their liquidity risk.

Why is liquidity risk inherent to the business of banking? How can a bank seek to minimize its liquidity risk?

What are the main risks that credit ratings reflect? Do we need creditratings? What are the parameters and risks that credit risk ratings do notincorporate and investors need to be aware of?