Assume That a Bank Obtains Most of Its Funds from Large

question 2

Multiple Choice

Assume that a bank obtains most of its funds from large CDs with a one-year maturity. Its assets are in the form of loans with rates that adjust every six months. The bank would be ____ affectedif interest rates increase. To partially hedge its position, it could ____ futures contracts.

• A) adversely; purchase
• B) favorably; sell
• C) favorably; purchase
• D) adversely; sell

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Definitions:

Institutionalized Socialization Tactics

Organized methods used within institutions or organizations to assimilate new members into the prevailing culture or set of norms.

Self-selection

The process where individuals voluntarily choose to participate in a particular group, activity, or study based on their personal characteristics or preferences.

Selection Process

The procedure of choosing the most suitable candidates for a job or a role based on predefined criteria.

Acquisition Of Information

Acquisition of information involves the process of gathering, identifying, and obtaining necessary data or knowledge from various sources to inform decisions, strategies, or understand phenomena.