When Considering Interest Rate Risk in the Banking Book, Retail

question 123

Multiple Choice

When considering interest rate risk in the banking book, retail demand deposits without fixed contractual maturity:

• A) should be assumed to have zero duration
• B) should be treated like other instantly variable rate liabilities, such as overnight money market borrowing.
• C) should be assumed to have a low correlation with money market reference rates
• D) represent a minor contributor to interest rate risk and can safely be disregarded

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Definitions:

Hispanic Americans

Americans who are descendants of people from Spanish-speaking countries in Latin America and Spain, with distinct cultural, historical, and social backgrounds.

Homogeneous

Consisting of parts or elements that are all the same; uniform in structure or composition.

Discrimination

Unfair treatment of individuals based on their race, gender, age, disability, sexual orientation, religion, or other characteristics, rather than on their merits or abilities.

William Julius Wilson

An influential American sociologist known for his research and writings on issues related to race, class, and inequality.