The Liquidity Coverage Ratio (LCR) focuses on a 30-day period, while the Net Stable Funding Ratio (NSFR) focuses on a 1-year period. The LCR is designed to ensure that a bank has an adequate stock of unencumbered high-quality liquid assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30-day time horizon under a significantly severe liquidity stress scenario. On the other hand, the NSFR is a longer-term structural ratio designed to address liquidity mismatches and provide incentives for banks to use stable sources of funding. It aims to measure the amount of longer-term, stable sources of funding employed by an institution relative to the liquidity profiles of the assets funded and the potential for contingent calls on funding liquidity arising from off-balance sheet commitments and obligations, over a one-year horizon.

Choice A is incorrect because while it correctly identifies the time horizon for the LCR as a 30-day period, it incorrectly states that the NSFR focuses on a 2-year period. The NSFR actually focuses on a 1-year period. The NSFR is designed to ensure that long-term assets are funded with at least a minimum amount of stable liabilities in relation to their liquidity risk profiles over a one-year period.

Choice B is incorrect because it incorrectly identifies the time horizons for both the LCR and the NSFR. The LCR focuses on a 30-day period, not a 1-year period as stated in this choice. Similarly, the NSFR focuses on a 1-year period, not a 30-day period. The LCR is designed to ensure that a bank has an adequate stock of unencumbered high-quality liquid assets (HQLAs) that can be converted into cash to meet its liquidity needs for a 30-day time horizon. The NSFR, on the other hand, is designed to ensure that long-term assets are funded with at least a minimum amount of stable liabilities in relation to their liquidity risk profiles over a one-year period.

Choice C is incorrect because it incorrectly identifies the time horizons for both the LCR and the NSFR. The LCR focuses on a 30-day period, not a 2-year period as stated in this choice.