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Although ALM frameworks differ greatly among organizations, they typically involve the mitigation of a wide range is risks. Some of the most common risks addressed by ALM are interest rate risk and liquidity risk. Interest Rate Risk Interest rate risk refers to risks associated with changes to interest rates, and how changing interest rates affect future cash flows. Financial institutions typically hold assets and liabilities that are affected by changing interest rates. Two of the most common examples are deposits (assets) and loans (liabilities). As both are impacted by interest rates, an environment where rates are changing can result in a mismatching of assets and liabilities. Liquidity Risk Liquidity risk refers to risks associated with a financial institutionrsquo;s ability to facilitate itrsquo;s present and future cash-flow obligations, also known as liquidity. When the financial institution is unable to meet its obligations due to a shortage of liquidity, the risk is that it will adversely affect its financial position. To mitigate the liquidity risk, organizations may implement ALM procedures to increase liquidity to fulfill cash-flow obligations resulting from their liabilitiesOther Types of Risk Aside from interest and liquidity risks, other types of risks are also mitigated through ALM. One example is currency risk, which are risks associated with changes to exchange rates. When assets and liabilities are held in different currencies, a change in exchange rates can result in a mismatch. Another example is capital market risk, which are risks associated with changing equity prices. Such risks are often mitigated through futures, options, or derivatives.
A sum of Rs. 642 is divided among X, Y and Z such that X gets Rs. 144 more than Y. Y gets Rs. 90 more than Z. Find the share of Z?
Three numbers are in ratio 5:6:7. If the sum of the squares of those three numbers is 440 then find the sum of the three numbers.
The sum of three numbers is 189. If the ratio of the first to the second is 3:4 and that of second to the third is 5:7 then the second number is?
If A:B:C = 3:4:7 and (C - A + B) = 48, then find the value of (2C + A2).
In a class of 250 students, 150 are girls and remaining are boys. Among boys, the ratio of number of boys who are wearing caps to those who are not wear...
Abdul allocates 90% of his income among his wife, son, and daughter in the ratio of 5:2:1, while saving the remaining amount, which totals Rs. 4,000. Fr...
Marks scored by A and B in a test are in the ratio 13:6 respectively. If B had scored 4 more marks, then marks scored by A would be 30% more than that o...
In an orchard, the ratio of the number of mango and lichi trees is 3:5, respectively. Also, there are few apple trees in the orchard which is 50% more t...
The earnings of two individuals, P and Q, are in the ratio of 4:7. After an increase of 30% in Q’s earnings, his total earnings amount to Rs. 27,300. ...
Rs 1927 was divided among Anil, Bhanu and Charan in the ratio of 14:9:18 respectively. Find the amount received by Anil and Bhanu together.
