Which of the Following Is NOT an Internal Method of Interest

question 48

Multiple Choice

Which of the following is NOT an internal method of interest rate risk management?

• A) Changing the timing of cash flows
• B) Changing the structure of the balance sheet to minimise exposure
• C) Using forward rate agreements
• D) Imposing a financial penalty for early repayment of a loan

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Definitions:

Net Earnings

The profit determined after all expenses and taxes have been subtracted from total revenue.

Payroll Tax Expense

Charges levied on both employers and employees, calculated as a proportion of the wages that employers distribute to their workers.

Wages Payable

A liability account that records the amounts owed to employees for work performed but not yet paid.

Liability

refers to any type of financial commitment or obligation that an entity is responsible for, such as debts and legal responsibilities.