Question: help with 1 and 2 please 1 Normal 1 No Spac... Heading 1 Heading 2 Paragraph Styles FIN 370 Section VIII: Risk Management Exercises Part

help with 1 and 2 please help with 1 and 2 please 1 Normal 1 No Spac... Heading

1 Normal 1 No Spac... Heading 1 Heading 2 Paragraph Styles FIN 370 Section VIII: Risk Management Exercises Part A SARAH 1. Liquidity management can be practiced on either side of the balance sheet. How are asset and liability management similar? Different? Why do smaller banks have limited access to liability management? 2. Distinguish between credit risk of individual loans and the credit risk of loan portfolios. How are they related? 3. How do banks decide on the proper amount of primary and secondary reserves to hold? 4. Describe how credit default swaps can be used to manage credit risk exposure. Why do banks use these? 5. Assume the following balance sheet for All Star Bank. What does the balance sheet look like if a customer decides to exercise a $15MM loan commitment if the bank meets the borrowing need A) by "buying" (borrowing) liquidity and B) by using internal funds? Base Case

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