Multiple Choice
Which of the following situations pose a refinancing risk for an FI?
A) An FI issues $10 million of liabilities of one-year maturity to finance the purchase of $10 million of assets with a two-year maturity.
B) An FI issues $10 million of liabilities of two-year maturity to finance the purchase of $10 million of assets with a two-year maturity.
C) An FI issues $10 million of liabilities of three-year maturity to finance the purchase of $10 million of assets with a two-year maturity.
D) An FI matches the maturity of its assets and liabilities.
E) All of these.
Correct Answer:
Verified
Correct Answer:
Verified
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