People like to keep money in checking accounts because they can use that money to make...
People like to keep money in checking accounts because they can use that money to make transactions or withdraw it as cash. In other words, the funds in those accounts are ___.
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Liquid |
||
|
Solvent |
||
|
Distributable |
||
|
Marketable |
For a bank, market risk means which of the following?
|
Assets may decrease in value because of changed market conditions |
||
|
Liabilities may increase in value because of changed market conditions |
||
|
Market analysts may publish data that undermines the bank's reputation |
||
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Both a and b are examples of market risk |
Homework Answers
1) Answer: Liquid
In checking account in a bank is a deposit account where we can withdraw or deposit cash into that account. Here balance in the account can liquified any time into cash without any problems.
2) Answer: Both a and b are examples of market risk
Any change in market conditions may increase or decrease the value of any assets. Liabilities also may change due to change in market conditions.
Example: Interest rates may go up or down, equity assets may gain or loose value.
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