An FI Has Long-Term Fixed-Rate Assets Funded by Short-Term Variable-Rate

question 28

Multiple Choice

An FI has long-term fixed-rate assets funded by short-term variable-rate liabilities. To protect the equity value,the FI may engage in a swap to pay a _____ rate and receive a _____ interest.

• A)fixed; variable
• B)variable; variable
• C)variable; fixed
• D)fixed; fixed

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Definitions:

Compensation Package

The total combination of benefits and salary offered to an employee, which may include bonuses, health insurance, and retirement plans.

Fixed Period

A set length of time during which an event or condition exists or must be completed.

Team Incentives

Rewards or benefits given to a group of employees for achieving specific goals or performance targets.

Performance Measures

Metrics used to assess the efficiency, effectiveness, and quality of an employee's or organization's work.