Interest Rate Risk May Be Reduced by Using Which of the Following

question 10

Multiple Choice

Interest rate risk may be reduced by using which of the following?

• A)adjustable-rate loans
• B)better credit analysis
• C)nondeposit liabilities
• D)only fixed-rate loans

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Definitions:

Note Receivable

A written promise or obligation for the payment of a certain sum of money to the holder on demand or at a specified future date.

Interest Receivable

The revenue from interest that has been earned but not yet received, recorded as an asset on the balance sheet.

Discounts Own Note

A transaction where a business discounts or reduces the value of its own promissory note, often to raise short-term capital.

Notes Payable

Written promises to pay a specified sum of money, typically to a lender, by a certain date.