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Question
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 the above.
Answer
This answer is hidden. It contains 344 characters.
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