A financial institution can be solvent but illiquid

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Reference no: EM131108008

Choose the statement that is incorrect.

A) A financial? institution's net worth is the market value of what it has lent minus the market value of what it has borrowed.

B) If a financial? institution's net worth is? positive, the institution must be solvent and liquid.

C) A financial institution can be solvent but illiquid.

D) A financial institution is illiquid if it has made? long-term loans with borrowed funds and is faced with a sudden demand to repay more of what it has borrowed than its available cash.

Reference no: EM131108008

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