If Interest Rates on Both Assets and Liabilities Rise by 2

question 51

Multiple Choice

If interest rates on both assets and liabilities rise by 2 percent in the next 90 days,what would be the bank's net interest margin?

• A)4 percent
• B)4.4 percent
• C)4.6 percent
• D)2.4 percent
• E)6 percent

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Definitions:

Selling Price

The amount at which a product or service is offered to customers, factoring in costs, desired profit margins, and market conditions.

Absorption Costing

An accounting system that factors in all production costs—direct labor, direct materials, and both fixed and variable manufacturing overheads—into the pricing of a product.

Cost-plus Pricing

is a pricing strategy where the selling price is determined by adding a specific markup to a product's cost.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.