Which of the Following Statements Does Not Explain Why Banks

question 593

Multiple Choice

Which of the following statements does not explain why banks accept some amount of interest rate risk?

• A) In their function as intermediaries, banks must necessarily accept some degree of interest rate risk.
• B) Banks incur interest rate risk to increase income
• C) Banks prefer c red it risk to market risk.
• D) If banks failed to take on interest rate risk they would not be able to meet the needs of their deposit and loan customers.

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Definitions:

Developing

A descriptor for countries or regions undergoing economic, industrial, and social progress, often with rapid growth and improvement in living standards.

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation.

Human Development

The multidisciplinary study of how people change and how they remain the same over time.

Piaget

Jean Piaget was a Swiss psychologist known for his pioneering work in child development, particularly his theory of cognitive development that describes how children construct a mental model of the world.