If a Bank Has Long-Term Fixed-Rate Assets and Short-Term Liabilities

question 9

Multiple Choice

If a bank has long-term fixed-rate assets and short-term liabilities, and interest rates increase over time, its net interest margin should

• A) decrease
• B) increase
• C) stay the same.
• D) either A or B, depending on whether the asset maturities exceed 10 years

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Definitions:

Flower Parts

The components of a flower, including petals, sepals, stamens, and pistils, which are involved in reproduction through the processes of pollination and fertilization.

Modified Branch

A plant structure that has evolved from a basic branch form to serve a different function, such as a cactus spine or a climbing tendril.

Whorl

A pattern in which leaves, petals, or other plant parts are arranged in a circular fashion around a central axis.

Sepals

Sepals are the often green, leaf-like parts of a flower that protect the developing bud.