question archive Commercial banks are typically more exposed to a
Commercial banks are typically more exposed to a
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Commercial banks are typically more exposed to
a. reinvestment risk because of their asset transformation function.
b. foreign exchange risk because they disproportionately borrow domestically to lend abroad .
c. market risk because a majority of bank assets is in the form of tradable securities.
d. refinancing risk because of their asset transformation function.
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D. Refinancing risk is the risk that the cost of reborrowing funds will rise above the returns. The risk occurs when the commercial bank is holding assets with maturities greater than the maturities of its liabilities
