If a Banker Expects Interest Rates to Fall in the Future,her

question 95

Multiple Choice

If a banker expects interest rates to fall in the future,her best strategy for the present is

• A)to increase the duration of the bank's liabilities.
• B)to buy short-term bonds.
• C)to sell long-term certificates of deposit.
• D)to increase the duration of the bank's assets.

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Definitions:

Willingness to Pay

Willingness to pay represents the maximum amount an individual is prepared to spend to acquire a good or service.

Marginal Cost

The boost in total charges linked to the creation of one more unit of a product or service.

Public Good

For the benefit of all society members, goods or services are offered at no cost, either by government agencies or private individuals or organizations, not with the aim of profit.

Civil Defense System

A civil defense system encompasses measures and responses designed to protect civilians and infrastructure from natural disasters, military attacks, or other emergencies.