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1. quizlet.com › 835670858 › bank-chapter-11-flash-cardsBank chapter 11 Flashcards - Quizlet

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   Liquid assets must have a reasonably stable price so that the market is deep enough to absorb the sale without a significant loss of value. Asset liquidity management (asset conversion) involves storing liquidity in assets, such as land and buildings.

2. quizlet.com › 198605173Asset-Liability Management Commercial Banking Exam 2 #9 - Quizlet

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   1. Maintaining sufficient liquidity. 2. Maximizing net interest management (NIM) but avoid significant risks and losses. • Objectives of liquidity. Liquidity is the ability to: a) quickly raise cash by selling investments. b) Receive a return on liquid assets but avoid a significant capital loss. Note: risky assets tend to have restricted liquidity

3. quizlet.com › 207920721 › chapter-9-banking-and-theChapter 9: Banking and the management of financial ... - Quizlet

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   Preview. Study with Quizlet and memorize flashcards containing terms like Bank Liability with examples, bank asset with examples, rank bank's assets from the most liquid to the least and more.

4. www.studocu.com › en-ca › documentTest Bank FIN 220 Chap007 - Chapter 07 Current Asset ...

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   Current Asset Management. Multiple Choice Questions. In managing cash and marketable securities, what should be the manager's primary concern? A. Maximization of profit B. Maximization of liquid assets C. Acceptable return on investment D. Liquidity and safety

5. www.studocu.com › tbchap-018-test-bank › 2763507TBChap 018 - TEST BANK - Chapter 18 Liability and Liquidity ...

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   Chapter 18 Liability and Liquidity Management Answer Key True False Questions 1. To reduce liquidity risk an FI can efficiently manage the liability structure of its portfolio. 2. TRUE One method of reducing the risk of a liquidity crisis for an FI to efficiently manage liquid asset positions. 3.

6. www.investopedia.com › terms › aAsset/Liability Management: Definition, Meaning, and Strategies

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   Jul 31, 2024 · Asset/liability management is the process of managing the use of assets and cash flows to reduce the firm’s risk of loss from not paying a liability on time. Well-managed assets and...

7. People also ask

   What is asset/liability management?

   • Asset/liability management is the process of managing the use of assets and cash flows to reduce the firm’s risk of loss from not paying a liability on time. Well-managed assets and liabilities increase business profits. The asset/liability management process is typically applied to bank loan portfolios and pension plans.

   Asset/Liability Management: Definition, Meaning, and

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   What is liquidity risk management?

   • The essence of liquidity risk lies in the mismatch between assets and liabilities, where the assets can't be easily liquidated at market value to meet the short-term obligations. Liquidity risk management is critical to ensuring that cash needs are continuously met.

   Understanding Liquidity Risk in Banks and Business, With

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   What are the repercussions of unmanaged or poorly managed liquidity risk?

   • The repercussions of unmanaged or poorly managed liquidity risk can be severe and far-reaching. It can lead to financial losses from selling assets at depressed prices, operational disruptions due to inadequate cash flow, and reputational damage that can further exacerbate liquidity issues.

   Understanding Liquidity Risk in Banks and Business, With

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   What is market liquidity?

   • Market liquidity is defined by the ease with which an asset can be exchanged for money. The risks relate to when an entity cannot execute transactions at prevailing market prices due to inadequate market depth, a lack of available buyers for assets held, or other market disruptions.

   Understanding Liquidity Risk in Banks and Business, With

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   How do banks manage liquidity?

   • Banks are guided by robust regulatory frameworks like Basel III, which sets stringent liquidity standards to ensure financial stability and safeguard depositor interests, highlighting the global focus on strong liquidity risk management.

   Understanding Liquidity Risk in Banks and Business, With

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   How does liquidity risk affect a business?

   • Both dimensions of liquidity risk are interconnected and can exacerbate each other. For example, an inability to secure short-term funding (funding liquidity risk) may force an entity to sell assets at a loss (market liquidity risk), further weakening its financial position and deterring potential lenders or investors.

   Understanding Liquidity Risk in Banks and Business, With

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8. www.investopedia.com › terms › lUnderstanding Liquidity Risk in Banks and Business, With Examples

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   Aug 22, 2024 · Effective liquidity risk management involves ensuring the availability of sufficient cash, liquid assets, and accessible borrowing lines to meet both expected and unexpected liquidity needs.