Question

An increasingly positive financing gap can indicate ________________ liquidity risk because it may indicate _______________ deposits and/or rising loan commitments. Multiple Choice increasing; increasing decreasing; decreasing increasing; decreasing decreasing; increasing

Answer 1

Increasing; Decreasing

Step-by-step explanation:

Liquidity risk generally arises when a business or individual with immediate cash needs, holds a valuable assets that it can not trade or sell at market value due to a lack of buyers, due to an inefficient market where it is difficult to bring buyers and sellers together.

Answer 2

Increasing; Decreasing.

Step-by-step explanation:

An increasingly positive financing gap can indicate increasing liquidity risk because it may indicate decreasing deposits and/or rising loan commitments.