ASSET AND LIABILITY MANAGEMENT

Question 1

a strategic approach used by financial institutions to manage the risks associated with their assets and liabilities.

Answer 1

Asset and liability management (ALM)

Question 2

refer to the financial resources owned by the institution, such as loans, investments, and cash reserves.

Answer 2

CASH

Question 3

represent the financial obligations of the institution, such as deposits, borrowings, and other forms of debt.

Answer 3

LIABILITIES

Question 4

analyzing and monitoring the institution’s balance sheet to ensure that the maturity and cash flow characteristics of its assets and liabilities are aligned.

Answer 4

Effective ALM

Question 5

ALM helps financial institutions manage _________ by matching the repricing characteristics of their assets and liabilities

Answer 5

INTEREST RATE RISK MANAGEMENT

Question 6

ALM also focuses on managing ___________ by ensuring that the institution has sufficient liquid assets to meet its short-term obligations.

Answer 6

LIQUIDITY RISK MANAGEMENT

Question 7

optimize their funding sources and capital structure to support their business activities and growth objectives

Answer 7

FUNDING AND CAPITAL MANAGEMENT

Question 8

_________ mechanisms to assess the institution’s exposure to various risks, such as credit risk, market risk, and operational risk

Answer 8

Risk Measurement and Reporting