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All of the statements below are not false, except: 1. Changes in interest rates represent a...

Question

All of the statements below are not false, except: 1. Changes in interest rates represent a...

All of the statements below are not false, except: 1. Changes in interest rates represent a risk for both borrowers and inves
All of the statements below are not false, except: 1. Changes in interest rates represent a risk for both borrowers and investors because of diminishing investment prospects and increased cost of borrowing; II. Failure to pay accounts receivable on time by customers may have a significant negative impact on the capital base of a company; III. Companies involved in cross-border trades are subject to FX risks: IV. It is essential for banks to assess the creditworthiness of customers to mitigate the credit risk; V. Liquidity is an important consideration only for a central bank as it takes care of the availability of funds within a financial system. Select one: a. Only v b. Only II and V c. Only d. All of the statements are true e. All of the statements are false

Answers

Answer: b. Only II and V.

Explanation:

I] Interest rate risk is applicable to both borrowers and lenders

III] The statement is correct as cross border trade creates FX risks

IV] It is true for all lenders


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