IBSL Diploma In Applied Banking And Finance (DABF) Exam Practice Questions - IBSL Diploma In Applied Banking And Finance (DABF) Exam

Which of the following best describes 'liquidity risk' for a commercial bank?

The risk that a bank's capital will fall below regulatory minimums The risk of a sudden, unexpected withdrawal of deposits leading to insufficient cash reserves The risk of losses due to changes in market interest rates affecting the value of assets The risk of fraud or operational failures causing financial losses

Correct Answer:

The risk of a sudden, unexpected withdrawal of deposits leading to insufficient cash reserves

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