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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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