If a Bank Has Long-Term Fixed-Rate Assets and Short-Term Liabilities

question 22

Multiple Choice

If a bank has long-term fixed-rate assets and short-term liabilities, and interest rates increase over time, its net interest margin should

• A)decrease.
• B)increase.
• C)stay the same.
• D)EITHER decrease OR increase, depending on whether the asset maturities exceed 10 years.

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Definitions:

Leadership Qualities

Characteristics or traits that are effective for guiding or directing a group towards achieving a goal.

Emotional Instability

A state characterized by rapid changes in mood or emotions, often without a clear cause.

Psychotherapy

The treatment of mental disorder by psychological rather than medical means.

Role Playing

A training or learning method where individuals assume roles and act out scenarios to improve skills, solve problems, or understand different perspectives.