Financial Institutions That Hold Fixed-Rate Mortgages in Their Asset Portfolios

question 24

Multiple Choice

Financial institutions that hold fixed-rate mortgages in their asset portfolios are exposed to ____ risk, because they commonly use funds obtained from short-term customer deposits to make long#NAME?erm mortgage loans.

• A) exchange rate
• B) prepayment
• C) reinvestment rate
• D) interest rate
• E) exchange rate.

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Definitions:

Plasma

The liquid component of blood in which the blood cells are suspended, consisting mainly of water, proteins, electrolytes, and nutrients.

RBCs

Red blood cells, responsible for carrying oxygen from the lungs to the body's tissues and returning carbon dioxide back to the lungs.

WBCs

White Blood Cells, components of the blood involved in protecting the body against both infectious disease and foreign invaders.

Aplastic Anemia

A blood disorder characterized by the bone marrow's failure to produce enough new blood cells, leading to fatigue and higher risk of infections.