One Factor Contributing to the Decline in Cost Advantages That

question 108

Multiple Choice

One factor contributing to the decline in cost advantages that banks once had is the

• A)decline in the importance of checkable deposits from over 60 percent of banks' liabilities to 11 percent today.
• B)decline in the importance of savings deposits from over 60 percent of banks' liabilities to under 15 percent today.
• C)decline in the importance of checkable deposits from over 40 percent of banks' liabilities to 15 percent today.
• D)decline in the importance of savings deposits from over 40 percent of banks' liabilities to under 20 percent today.

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Definitions:

Convexity

A measure of the curvature or the rate of change of the bond's duration as interest rates change, affecting the bond's price sensitivity to interest rate changes.

Yield

The income generated by an investment, often expressed as a percentage of the investment's cost or market value.

Basis Points

A financial measurement unit representing the percentage shift in the value or rate of a financial asset, which is equal to one hundredth of a percent.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, expressed as an annual rate.