If the Spread Between Rate-Sensitive Assets and Rate-Sensitive Liabilities Increases

question 22

True/False

If the spread between rate-sensitive assets and rate-sensitive liabilities increases for a bank, future changes in interest rates will lead to an increase in net interest income.

---

Definitions:

Direct Materials

The raw materials directly used in the production of a product, which are easily traceable and integral to the finished good.

Work in Process

Inventory that includes items in the production process but not yet completed or ready for sale.

Production

The process of creating goods or services by combining labor, materials, and machinery.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products by estimating overhead costs before production begins.