If a Bank Is Exposed to Refinancing Risk,its Profitability Is

question 34

Multiple Choice

If a bank is exposed to refinancing risk,its profitability is reduced if interest rates ________ and if it is exposed to reinvestment risk,its profitability is reduced if interest rates ________.

• A)rise; fall
• B)rise; rise
• C)fall; rise
• D)fall; fall
• E)rise; stay the same

---

Definitions:

Division of Carolina

This refers to the split of the Carolina colony into North and South Carolina in 1712, originally chartered as one territory by the English Crown.

Proprietors

Individuals or entities that own a business or property, characterized by having legal title and the right to use property at their discretion.

John Locke

A 17th-century English philosopher renowned for his theories of natural rights and the social contract.