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. 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. 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. An increase in the bank's credit rating will help to reduce their liquidity 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. 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. 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. An increase in the bank's credit rating will help to reduce their liquidity risk.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter25: Money, Banking, And The Federal Reserve System

Section: Chapter Questions

Problem 4P

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