When an FI Pre-Commits to Lending at a Fixed Rate,it

question 42

Multiple Choice

When an FI pre-commits to lending at a fixed rate,it is exposed to

• A)credit risk.
• B)interest rate risk.
• C)takedown risk.
• D)funding risk.

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Definitions:

Antipsychotic Drug

Medication used to treat psychiatric conditions by altering brain chemistry to reduce psychotic symptoms like hallucinations or delusions.

Lithium

A chemical element used in the treatment of bipolar disorder and other psychiatric conditions to stabilize mood.

Electroconvulsive Therapy

A psychiatric treatment involving electrically induced seizures for therapeutic effect, often used in severe cases of depression.

Depression

A mental health disorder characterized by persistent sadness, loss of interest in activities, and a range of emotional and physical problems.