When Interest Rates Fall a Bank's Capital Will Usually

question 61

Multiple Choice

When interest rates fall a bank's capital will usually:

• A) not change.
• B) decrease.
• C) turn negative.
• D) increase.

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Definitions:

Liability Account

An account on the balance sheet that represents obligations to pay debts or amounts owing to lenders, suppliers, employees, or other creditors.

Rent Received

Income earned from leasing out property or equipment to another party.

Materiality

A principle that dictates that all significant information that could influence the decision-making process of users of financial statements should be disclosed.