A Decrease in Interest Rates Means That the Discount Rate

question 24

Multiple Choice

A decrease in interest rates means that the discount rate on cash flows is:

• A)decreased and thus the market value of an FI's assets and liabilities decreases.
• B)increased and thus the market value of an FI's assets and liabilities decreases.
• C)increased and thus the market value of an FI's assets and liabilities increases.
• D)decreased and thus the market value of an FI's assets and liabilities increases.

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Definitions:

Advice and Consent

A constitutional principle that requires the Senate to approve certain appointments made by the President.

Treaties

Formal agreements between sovereign states or between sovereign states and international organizations, typically ratified by the legislative bodies of those entities.

Senate

The upper house of the United States Congress or of a state legislature, responsible for making and passing laws.

Necessary and Proper Clause

A provision in the U.S. Constitution granting Congress the power to pass all laws necessary and proper for carrying out its enumerated powers.