Question: Systemic risk exists because: a.financial institutions borrow using long-term debt securities but lend their funds for short-term periods. b.financial institutions invest heavily in Treasury securities

Systemic risk exists because:

a.financial institutions borrow using long-term debt securities but lend their funds for short-term periods.

b.financial institutions invest heavily in Treasury securities and therefore are exposed to the possibility that the government will default on its debts.

c.financial institutions invest in similar securities and therefore are similarly exposed to large declines in prices of those securities.

d.there is no government regulation of financial markets.

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