Assume That a Bank Obtains Most of Its Funds from Large

question 54

Multiple Choice

Assume that a bank obtains most of its funds from large CDs with a five-year maturity. Its assets are in the form of loans with rates that adjust every six months. The bank would be ____ affected if interest rates decline. To partially hedge its position, it could ____ interest rate futures contracts.

• A)adversely; purchase
• B)favorably; sell
• C)favorably; purchase
• D)adversely; sell

---

Definitions:

Cortisol

A steroid hormone produced by the adrenal glands, often referred to as the "stress hormone," as it is involved in response to stress and anxiety.

Impulsivity

The tendency to act or react quickly without adequate thought, often leading to unintended or potentially harmful outcomes.

Biological Processes

Fundamental processes vital for living organisms, such as growth, reproduction, metabolism, and adaptation.

Social Behavior

Actions or reactions of an individual in relation to the social environment, often studied to understand how individuals interact within groups and societies.