A fiNancial Institution Has Equity Equal to One-Tenth of Its

question 51

Multiple Choice

A financial institution has equity equal to one-tenth of its assets.If its asset duration is currently equal to its liability duration, then to immunize, the firm needs to:

• A)decrease the duration of its assets.
• B)increase the duration of its assets.
• C)decrease the duration of its liabilities.
• D)do nothing, i.e., keep the duration of its liabilities equal to the duration of its assets.
• E)None of the above.

Learn how to adapt business communication strategies when engaging with international audiences.

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Recognize the significance of avoiding cultural insensitivity to prevent offending individuals from other countries.

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Definitions:

Excess Weight

The additional body weight that is above the recommended limits for optimal health, often resulting from accumulated fats in the body.

Appetite

The natural desire to satisfy a bodily need, especially for food, distinct from the physical sensation of hunger.

Complex Carbohydrates

Carbohydrates consisting of long chains of sugar molecules, providing sustained energy and found in foods like grains, fruits, and vegetables.

Drive Reduction

A theory of motivation suggesting that behavior is motivated by the desire to reduce internal drives caused by unmet physiological needs.