The Following Are the Assets and Liabilities of a Government

question 13

Multiple Choice

The following are the assets and liabilities of a government security dealer. What is the impact over the next 30 days on the dealer's net interest income if all interest rates increase by 50 basis points?

• A)Net interest income will decrease by $50,000.
• B)Net interest income will decrease by $2.125 million.
• C)Net interest income will decrease by $475,000.
• D)Net interest income will decrease by $2.375 million.
• E)Net interest income will increase by $750,000.

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Definitions:

Elastic Demand

A situation where the quantity demanded of a good or service significantly changes in response to a change in price.

Unitary Elastic

A situation where the percentage change in quantity demanded is equal to the percentage change in price, indicating a proportional relationship.

Video Games

Electronic games that involve user interaction with a user interface to generate visual feedback on a two- or three-dimensional video display device such as a TV screen, computer monitor, or handheld device.

Inferior Good

A type of good whose demand decreases as the consumer's income increases, contrasting with normal goods where demand increases with income.