Which of the Following Is Not a Likely Method Used

question 24

Multiple Choice

Which of the following is not a likely method used by a bank to reduce interest rate risk?

• A) maturity matching
• B) using fixed-rate loans
• C) using interest rate futures contracts
• D) using interest rate caps

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Definitions:

Expense

An outflow of money or other resources incurred as a result of the company’s operations to generate revenue, representing the cost of doing business.

Prepaid Insurance

An asset account that represents insurance payments made in advance for future coverage periods.

Insurance Expense

The cost incurred by a company to insure its assets, operations, or liabilities against various risks over a specific period.

Accounts Payable

An entry in financial accounts showing a corporation's duty to reimburse a short-term loan from its creditors or vendors.