9
AssignmentMultiple Choice

Managing Liability and Liquidity Risk

Question 9 • AHS Introduction to Careers in Finance

A bank’s liquidity ratio looks at _____. (Select all that apply.)

Answer
A
total liquid assets of the bank
B
total obligations to account holders
C
impact of interest rate changes
D
risk exposure by the bank

Explanation

A bank’s liquidity ratio compares the liquid assets it can use to meet withdrawals with the obligations it owes to account holders. Therefore, it looks at the bank’s total liquid assets and its total obligations to account holders. Interest-rate effects and general risk exposure are considered in other types of financial analysis.

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