• Card 20 / 40: Insolvency risk is the risk
    A) that a FI may not have enough capital to offset a sudden decline in the value of its assets relative to its liabilities
    B) that less equity capital to assets an FI has, the better it is
    C) that existing technology or support systems may malfunction or break down

    Answer:
    A) that a FI may not have enough capital to offset a sudden decline in the value of its assets relative to its liabilities

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Final Fin 421

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