Situation in which claims by financial institutions than claims issued by corporations is more considerable for investors is classified as
A
asset transformers
B
liability transformers
C
issuing transformers
D
claiming transformers
Correct Answer: asset transformers
Situation in which claims by financial institutions than claims issued by corporations is more considerable for investors is classified as asset transformers. Asset transformation is the process of creating a new asset (loan) from liabilities (deposits) with different characteristics by converting small denomination, immediately available and relatively risk free bank deposits into loans–new relatively risky, large denomination asset–that are repaid following a set schedule.