What Is Spread Effect

question 18

Multiple Choice

What is spread effect?

• A)Periodic cash flow of interest and principal amortization payments on long-term assets that can be reinvested at market rates.
• B)The effect that a change in the spread between rates on RSAs and RSLs has on net interest income as interest rates change.
• C)The effect of mismatch of asset and liabilities within a maturity bucket.
• D)The premium paid to compensate for the future uncertainty in a security's value.
• E)The value of an FI to its owners.

---

Definitions:

Furnishings

Items placed in a room or building to make it suitable for living or working in, such as chairs, tables, and beds.

Dorothea Dix

An American activist who significantly improved the care of the mentally ill in the 19th century by advocating for better asylum conditions.

Mentally Ill

A term describing individuals who have significant disorders in thought, emotion, or behavior, resulting in distress or impaired functioning.

Cultural Competence

The ability of an individual or organization to interact effectively with people of different cultures and socio-economic backgrounds.