Which One of the Following Conditions When Combined with Long-Term

question 204

Multiple Choice

Which one of the following conditions when combined with long-term, fixed-rate, low interest loans would tend to increase the financial risk of lending institutions the most?

• A) Volatile short-term rates that are relatively low.
• B) Volatile short-term rates that are relatively high.
• C) Fixed short-term rates that are relatively low.
• D) Volatile long-term rates that are relatively low.
• E) Fixed long-term rates that are relatively low.

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