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:

Secretion

The process by which substances are produced and discharged from cells or glands for a particular function in the organism.

Epithelial

Pertaining to the epithelium, the layer of cells covering internal and external surfaces of the body, including skin, glands, and digestive tract lining.

Electrical Impulses

Signals transmitted by neurons and other cells to communicate information within the body.

Neurons

Electrically excitable cells that process and transmit information through electrical and chemical signals in the nervous system.