In context with the banking business, which among the following is a correct definition of liquidity risk?
[A] Risk arising from funding of long term assets by short term liabilities or funding of short term assets by long term liabilities
[B] Risk arising from adverse movement of interest rates during a liquidity crunch in the markets
[C] Risk arising from the adverse movement of the value of the assets /investments etc.
[D] Risk arising from a party becoming defaulter
Show Answer
Correct Answer: A [Risk arising from funding of long term assets by short term liabilities or funding of short term assets by long term liabilities]
