If a Banker Expects Interest Rates to Fall in the Future,her

question 95

Multiple Choice

If a banker expects interest rates to fall in the future,her best strategy for the present is

• A)to increase the duration of the bank's liabilities.
• B)to buy short-term bonds.
• C)to sell long-term certificates of deposit.
• D)to increase the duration of the bank's assets.

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Definitions:

Three-Phase Transformers

Transformers designed to handle three-phase electric power, widely used in power transmission systems to step up or step down voltages.

Single-Phase Motors

Electric motors that operate with a single-phase power supply, commonly used in household appliances and light industry.

Line Current

The current that flows through the conductors of an electrical power system, such as in the power lines delivering electricity to consumers.

Phase Current

The current flowing through one phase circuit in a polyphase system, which could vary in magnitude and phase angle compared to currents in other phases.