EBK FINANCIAL MARKETS AND INSTITUTIONS
EBK FINANCIAL MARKETS AND INSTITUTIONS
6th Edition
ISBN: 8220100263750
Author: SAUNDERS
Publisher: YUZU
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Chapter 21, Problem 1DYU
Summary Introduction

To determine: The sources of liquidity risk.

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Explanation of Solution

Following are the sources of liquidity risk:

  • Strategic decisions to provide liquidity to the market
  • Reputation problems or other negative news like credit rating downgrades.
  • Macroeconomic changes like interest rate volatility and inflation.
  • Variation in market trends
  • Specific products and activities.

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