Login / Register   My Cart (0)

Here are all the actual test exam dumps for IT exams. Most people prepare for the actual exams with our test dumps to pass their exams. So it's critical to choose and actual test pdf to succeed.

All Products Contact now

Exam 2016-FRR Topic 1 Question 56 Discussion

Actual exam question for GARP's 2016-FRR exam
Question #: 56
Topic #: 1
Which of the following statements depicts a difference between funding liquidity risks and trading liquidity risks?

Suggested Answer: B Vote an answer

Funding liquidity risk and trading liquidity risk are two distinct types of liquidity risks faced by financial institutions, particularly banks.
* Funding Liquidity Risk: This type of risk pertains to a bank's ability to meet its financial obligations as they come due without incurring unacceptable losses. It primarily concerns the bank's ability to fund withdrawals, meet depositor demands, and other liabilities when they come due. If a bank cannot manage its funding liquidity, it may be forced to sell assets at fire sale prices, which can further deteriorate its financial condition.
* Trading Liquidity Risk: This risk, on the other hand, deals with the market liquidity of the bank's assets.
It involves the risk of being unable to buy or sell assets at or near their market value due to inadequate market depth or market disruptions. It is more concerned with the bid-offer spreads and the ability to execute trades without significantly impacting the market price of the asset.
References: Based on the information provided in "How Finance Works" document, funding liquidity risks are concerned with the ability of the bank to fund deposit withdrawals while trading liquidity risks are concerned with the change in bid-offer spreads of asset values.

by Clifford at Apr 22, 2025, 07:58 PM

Limited Time Offer

15%

Off

Get Premium 2016-FRR Questions as Interactive Self Test Engine or PDF

Comments

Chosen Answer:
This is a voting comment (?) , you can switch to a simple comment.
Switch to a voting comment New
Nick name: Submit Cancel
A voting comment increases the vote count for the chosen answer by one.

Upvoting a comment with a selected answer will also increase the vote count towards that answer by one. So if you see a comment that you already agree with, you can upvote it instead of posting a new comment.

Here are all the actual test exam dumps for IT exams. Most people prepare for the actual exams with our test dumps to pass their exams. So it's critical to choose and actual test pdf to succeed.

RECENT DISCUSSIONS

Useful Links

Contact Us

Our Working Time: ( GMT 0:00-15:00 )
From Monday to Saturday

Support: Contact now 

If you have any question please leave me your email address, we will reply and send email to you in 12 hours.

Copyright © 2026 Actual4test NETWORK CO.,LIMITED. All Rights Reserved. All trademarks used are properties of their respective owners. Privacy Policy

Disclaimer:
Actual4test doesn't offer Real SANS and GIAC Exam Questions.
Oracle and Java are registered trademarks of Oracle and/or its affiliates
Actual4test material do not contain actual actual Oracle Exam Questions or material.
Actual4test doesn't offer Real Microsoft Exam Questions.
Microsoft®, Azure®, Windows®, Windows Vista®, and the Windows logo are registered trademarks of Microsoft Corporation
Actual4test Materials do not contain actual questions and answers from Cisco's Certification Exams. The brand Cisco is a registered trademark of CISCO, Inc
CFA Institute does not endorse, promote or warrant the accuracy or quality of these questions. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
Actual4test does not offer exam dumps or questions from actual exams. We offer learning material and practice tests created by subject matter experts to assist and help learners prepare for those exams. All certification brands used on the website are owned by the respective brand owners. Actual4test does not own or claim any ownership on any of the brands.