A Bank Has an Average Duration of Its Liabilities Equal

question 3

Multiple Choice

A bank has an average duration of its liabilities equal to 2 years. The bank's average duration of its assets is 3.5 years. The bank's market value of equity is at risk if ________.

• A) interest rates fall
• B) credit spreads fall
• C) interest rates rise
• D) the price of all fixed-income securities rises

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Definitions:

Avoidant Woman

A descriptor for a woman who exhibits an avoidant attachment style, characterized by a reluctance to form or maintain close relationships.

Attachment Needs

The inherent human requirement for emotional bonds with significant others, crucial for personal development and psychological health.

Peers

Individuals of the same age or stage of development, often considered equals and sharing similar interests or social status.

Proximity Maintenance

One of three purposes of the attachment system. Bonds between infant and caregiver encourage and sustain physical closeness.