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Liquidity is a financial institution's ability to meet its cash and collateral obligations without sustaining losses. Discuss why the degree of liquidity risk is different

Liquidity is a financial institution's ability to meet its cash and collateral obligations without sustaining losses.

  • Discuss why the degree of liquidity risk is different for different types of financial institutions (e.g., retail banks, life insurance companies, hedge funds).
  • Discuss some of the risk management practices for liquidity risk.

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