A loan commitment is considered an off-balance sheet item because it will never get reflected on the balance sheet.

T/F

Liquidity risk occurs when businesses drawdown on their loan commitments or when depositors withdraw funds.

T/F

FIs raise capital through short-term debt and many times, this debt is rolled over after the maturity date. At some point, lenders will want to collect what they are owed. This is an example of credit risk.

T/F

When a FI faces substantial liquidity risk, their first option is to borrow more funds.

T/F