Q205
When maturities of liabilities and assets are mismatched and risk incurred by financial intermediaries then this risk is classified as
A.
interest rate risk
AnswerB.
channel rate risk
C.
economic risk
D.
issuance risk
Answer: Option A
Solution
Answer: Option A
Solution:
When maturities of liabilities and assets are mismatched and risk incurred by financial intermediaries then this risk is classified as interest rate risk. The interest rate risk, or market risk, refers to the chance that investments in bonds also known as fixed-income securities will suffer as the result of unexpected interest rate changes.