Question

What is asset-liability management (ALM) primarily concerned with?

a.

Maximizing short-term profits

b.

Managing the balance sheet to account for alternative interest rate and liquidity scenarios

c.

Minimizing market risk exposure

d.

Increasing leverage to boost returns

Posted under IC 14 Regulations of Insurance Business

Answer: (b).Managing the balance sheet to account for alternative interest rate and liquidity scenarios Explanation:Asset-liability management (ALM) primarily focuses on managing the balance sheet of an institution to account for alternative interest rate and liquidity scenarios. ALM involves strategies and techniques used by financial institutions to match their assets with liabilities in a way that minimizes risks such as credit risk, interest rate risk, and liquidity risk. By effectively managing assets and liabilities, institutions aim to ensure their financial stability and mitigate potential adverse impacts from fluctuations in interest rates and liquidity conditions.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. What is asset-liability management (ALM) primarily concerned with?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. According to the Indian Regulations outlined, what is the minimum percentage requirement for investments in Central Government Securities?

View solution

Q. What is the minimum percentage requirement for investments in Government securities and other Guaranteed securities, including Central Government Securities?

View solution

Q. Which of the following statements regarding insurance accounting is NOT correct?

View solution

Q. What are the three exceptions in general accounting standards for insurers carrying on general insurance business?

View solution

Q. How should premium be recognized as income?

View solution

Q. When should premium reserve for unexpired risks be created?

View solution

Q. How should acquisition costs be accounted for?

View solution

Q. What does the liability for outstanding claims include?

View solution

Q. What should the accounting estimates for claims cost include?

View solution

Q. How are loans typically measured?

View solution

Q. When should a Catastrophe Reserve be created?

View solution

Q. Which of the following are important accounting functions in a general insurance company?

View solution

Q. Why is accurate claims reserving crucial for insurers?

View solution

Q. Who are the stakeholders with varied interests in insurance reserving?

View solution

Q. What are the two main sets of reserves in insurance?

View solution

Q. At what level is the process of claims reserving carried out?

View solution

Q. Which two basic investment theories do insurance companies typically follow?

View solution

Q. How does Insurance Accounting differ from accounting in other industries?

View solution

Q. Reserves for unexpired risks come under the heading of which of the following?

View solution

Q. IBNR stands for what?

View solution
View All MCQs on IC 14 Regulations of Insurance Business

Recommended Subjects

Are you eager to expand your knowledge beyond IC 14 Regulations of Insurance Business? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Mass Transfer

Delve into the science of Mass Transfer with our specialized category. Explore...

Environmental Biotechnology

Discover the intersection of biology and environmental science with our Environmental...

Fluid Mechanics

Unlock the mysteries of fluids and their behavior with our Fluid Mechanics category....

Automotive Engine Design

Embark on a thrilling exploration of Automotive Engine Design, where the intricacies...

Waste Water Engineering

Navigate the challenges of wastewater treatment and management with our Waste Water...

Data Interpretation

Master the art of data analysis and interpretation with our Data Interpretation...

Basic Chemical Engineering

Get a solid foundation in Chemical Engineering with our Basic Chemical Engineering...

International Relations

Navigate the complex world of International Relations with our dedicated category....

Analytical Instrumentation

Dive into the world of precise measurements with our Analytical Instrumentation...