If a Bank Has $50 Million in Rate-Sensitive Assets and $20

question 105

Multiple Choice

If a bank has $50 million in rate-sensitive assets and $20 million in rate-sensitive liabilities then

• A)an increase in interest rates will reduce bank profits.
• B)a decrease in interest rates will reduce bank profits.
• C)interest rate changes will not impact bank profits.
• D)a decrease in interest rates will increase bank profits.

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Definitions:

Penetration Pricing Policy

A business strategy where the initial product price is set very low to gain market share quickly.

Sales Volume

The quantity of products or services sold within a specific period.

Low Initial Price

A pricing strategy where a product or service is offered at a low price to attract customers initially.

Point A to Point B

Represents the process or journey from a starting location, situation, or condition to a designated end or goal, often used figuratively.