Conyers Bank Holds U

question 39

Multiple Choice

Conyers Bank holds U.S.Treasury bonds with a book value of $30 million.However,the U.S.Treasury bonds currently are worth $28,387,500.

If the portfolio manager wants to shorten the bank's asset maturity,what type of risk is she concerned about?

• A)Credit risk.
• B)Foreign exchange rate risk.
• C)The risk of rising interest rates.
• D)The risk of falling interest rates.

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Definitions:

Function

A relation between a set of inputs and a set of permissible outputs, typically defined by a rule that every input is related to exactly one output.

Production Function

A mathematical model that describes the relationship between inputs used in production and the output generated from those inputs.

Marginal Product

The increase in output that results from a one-unit increase in the input of a particular resource, holding all other inputs constant.

Factor X

A hypothetical or unspecified factor in an equation, model, or situation that has an impact on the outcome but is not explicitly defined.