Question

The process of asset transformation refers to the conversion of:_______

a. safer assets into risky assets.
b. safer assets into safer liabilities.
c. risky assets into safer assets.
d. risky assets into risky liabilities.

Answer 1

Answer: c. Risky assets into safer assets

Step-by-step explanation:

The process of asset transformation refers to the conversion of risky assets into safer assets. Asset transformationa is simply a form of transformation in which financial institutions like banks use deposits in the generation of revenue through the pooling deposits in order to make loans. It has to do with transforming bank liabilities into bank assets.