Use the Following Table to Answer the Question

question 50

Multiple Choice

Use the following table to answer the question :

-If interest rates rise by 5 percentage points,say,from 10 to 15%,bank profits (measured using gap analysis) will

• A)decline by $0.5 million.
• B)decline by $1.5 million.
• C)decline by $2.5 million.
• D)increase by $1.5 million.

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Definitions:

Revenue Expenditures

Expenses that are directly matched with revenues for a specific period, typically affecting the income statement immediately.

Units-of-production

A depreciation method that allocates the cost of an asset over its useful life based on the amount of production the asset is capable of.

Depreciation Expense

Assigning the price of a tangible asset across its operational life.

Produced Units

Refers to the number of units of a product that have been completed and are ready for sale during a specific period.