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How can liquidity risk threaten the solvency of FIs? a. Depositors may require a higher interest rate on their deposits. b. FIs have to replace

How can liquidity risk threaten the solvency of FIs?

a.

Depositors may require a higher interest rate on their deposits.

b.

FIs have to replace cash and liquidity assets with long-term assets, leading to lower liquidity.

c.

FIs may have to immediately liquidate their assets at deep discount.

d.

FIs may have difficulty attracting more depositors.

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