If a Bank Has More Interest-Rate Sensitive Liabilities Than Interest-Rate

question 101

Multiple Choice

If a bank has more interest-rate sensitive liabilities than interest-rate sensitive assets, an increase in the interest rate will cause profits to:

• A)Increase
• B)Decrease
• C)Remain constant
• D)Be negative, meaning there will not be profits, only losses

---

Definitions:

Full-tuition Scholarships

Financial awards covering the entire cost of tuition for students, often based on academic merit, need, or other criteria, provided by educational institutions or donors.

Comparative Advantage

The ability of a country or individual to produce a particular good or service at a lower opportunity cost than others, leading to more efficient international trade.

Specialize

Focusing one’s efforts in a specific domain or area of expertise, often to increase efficiency and skill.

Greater Quantity

A higher amount or number of something, usually used in reference to the production or supply of goods.