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ABC Bank has most of their assets in long term securities like mortgages and a small amount of cash on hand. They are concerned that
ABC Bank has most of their assets in long term securities like mortgages and a small amount of cash on hand. They are concerned that bad news about the overall economy will result in a sudden rush of people who deposited their money in bank withdrawing their money. If the bank doesn't have enough cash on hand, they may have to rush to sell mortgages even if the prices are below market value. What type of risk is this?
- A. Country risk
- B. Credit risk
- C. Liquidity risk
- D. Insolvency risk
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