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:

Accounts Payable

Short-term liabilities representing amounts owed by a company to suppliers or creditors for goods and services received but not yet paid for.

Factoring

A financial transaction and a type of debtor finance where a business sells its accounts receivable to a third party (the factor) at a discount.

Net Working Capital

measures a company's short-term financial health by subtracting its current liabilities from its current assets, indicating the liquidity available to fund day-to-day operations.

Accounts Receivable

Unsettled financial obligations to a corporation from its customers for products or services already delivered or engaged in, awaiting payment.