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If the Interest Rate Spread Between Rate Sensitive-Assets and Rate

question 69

True/False

If the interest rate spread between rate sensitive-assets and rate sensitive liabilities increases for a bank, future increases in interest rates will lead to an increase in net interest income.


Definitions:

Money Market Mutual Funds

Investment funds that invest in short-term debt securities, providing investors with high liquidity and a relatively safe investment.

Eurodollars

Deposits held in U.S. dollars at banks outside the United States, used in international transactions and considered an important part of the global money market.

Hang Seng

An index that measures the performance of the largest companies listed on the Hong Kong Stock Exchange, representing various sectors of the economy.

DAX

A blue chip stock market index consisting of the 40 major German companies trading on the Frankfurt Stock Exchange.

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