When Interest Rates Increase, Banks Are More Likely to Be

question 23

True/False

When interest rates increase, banks are more likely to be forced to increase rate-sensitive liabilities to replace decreased balances in demand deposits and savings accounts.

---

Definitions:

Passive Core

An investment strategy focusing on long-term, low-cost investments such as index funds, forming the "core" of a portfolio around which more active investments might rotate.

Portfolio Management

The art and science of making decisions regarding investment mix and policy, matching investments to objectives, and balancing risk against performance.

Portfolio Management Process

The structured approach of managing investments including planning, implementation, and monitoring to achieve specific financial objectives.

Investment Management Process

The series of steps and decisions involved in managing an individual's or institution's investments, from setting objectives to selecting assets and monitoring performance.