For Every $100 in Assets, a Bank Has $40 in Interest-Rate

question 44

Multiple Choice

For every $100 in assets, a bank has $40 in interest-rate sensitive assets, and the other $60 in non-interest-rate sensitive assets. The same bank has $50 for every $100 in liabilities in interest-rate sensitive liabilities, the other $50 are in liabilities that are not interest-rate sensitive. If the interest rate on assets increases from 5 to 6 percent, and the interest rate on liabilities increases from 3 to 4 percent, the impact on the bank's profits per $100 of assets will be:

• A) an increase of $0.10.
• B) a decrease of $0.10.
• C) a reduction of $1.00.
• D) zero since the interest rates on assets and liabilities increased by the same amount.

Identify appropriate forecasting models based on characteristics of the time series such as trend and seasonality.

Calculate mean square error (MSE) for model accuracy assessment.

Calculate mean absolute percentage error (MAPE) for forecasting accuracy.

Understand the application of the double moving average model.

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Definitions:

Group's Attractiveness

Group's attractiveness refers to the qualities or attributes of a group that make it appealing or desirable to potential or current members.

Cohesiveness

The degree to which members of a group or team are united in pursuing their objectives and how attracted they are to the group, enhancing its stability and performance.

Builds Trust

The process of establishing credibility and reliability with others, crucial for fostering healthy relationships and teamwork.

Role Model

An individual admired for their behaviors, qualities, or achievements, serving as an example for others to emulate.