A US Bank Has Fixed-Rate Assets in US Dollars and Variable-Rate

question 90

Multiple Choice

A US bank has fixed-rate assets in US dollars and variable-rate liabilities in Euros.This bank is exposed to

• A)interest rate increases and an appreciation of the dollar.
• B)interest rate declines and an appreciation of the dollar.
• C)interest rate increases and a depreciation of the dollar.
• D)interest rate declines and a depreciation of the dollar.
• E)zero exposure to interest rate and exchange rate exposures.

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Definitions:

Imported

Goods or services brought into one country from another for sale, trade, or use.

U.S. Customs Service

A federal agency responsible for regulating and facilitating international trade, collecting import duties, and enforcing U.S. trade laws and regulations.

Government Tax

Compulsory charges levied by a government on its citizens and businesses to fund public services and infrastructure.

Amber Jewelry

Ornamental pieces made from amber, a fossilized tree resin, often appreciated for its color and natural beauty.