What can be a consequence of an asset liability mismatch?

An asset-liability mismatch occurs when there is a disparity between the types of assets held and the liabilities that need to be met. This situation can lead to increased financial risk because, if the assets cannot be liquidated quickly or if they are not generating expected cash flows, the organization may struggle to meet its liabilities as they come due. Consequently, this mismatch can create potential liquidity issues, where the business may find itself unable to access sufficient cash in a timely manner to cover its obligations. Therefore, option B accurately describes the significant risk associated with this financial situation, highlighting the risks of not properly aligning asset liquidity with liability requirements.