QUESTION 9

PART A:

Which of the following types of risk is most closely associated with the idea that a bank may not be able to

meet short-term obligations, such as meeting a depositor's withdrawal requests or paying a bill?

a.

liquidity risk

b.

operational risk

c.

credit risk

d.

default risk

e.

capital risk

PART B:

Nonperforming loans are

a.

loans with payments more than 90 days overdue

b.

loans where no payment or principal has been paid for over a year

c.

loans classified as potentially problematic in the future

d.

loans that have been written off as uncollectible

e.

loans with payments 30 days overdue