An Increase in Interest Rates

question 13

Multiple Choice

An increase in interest rates

• A)increases the market value of the FI's financial assets and liabilities.
• B)decreases the market value of the FI's financial assets and liabilities.
• C)decreases the book value of the FI's financial assets and liabilities.
• D)increases the book value of the FI's financial assets and liabilities.

---

Definitions:

Market Value

The market value at which you can buy or sell an asset or service right now.

Stock Dividend

A distribution of additional shares of a company to its shareholders, rather than paying a cash dividend.

Stock Subscription

Stock subscription refers to the process of offering new shares to existing or potential investors, often before the public offering.

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, reducing the amount of outstanding stock.