An FI That Finances Long-Term Fixed Rate Mortgages with Short-Term

question 125

Multiple Choice

An FI that finances long-term fixed rate mortgages with short-term deposits is exposed to

• A)increases in net interest income and decreases in the market value of equity when interest rates fall.
• B)decreases in net interest income and decreases in the market value of equity when interest rates fall.
• C)decreases in net interest income and decreases in the market value of equity when interest rates rise.
• D)increases in net interest income and decreases in the market value of equity when interest rates rise.

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Definitions:

Primary Wage Earner

The primary wage earner is the person in a household responsible for contributing the majority of income to sustain the family's living expenses.

Mother

A female parent or individual who fulfills the role of nurturing and raising a child.

Overtime Work

Work performed beyond the standard hours set for a workday or workweek, typically compensated at a higher pay rate.

Job Satisfaction

The level of contentment or happiness that individuals feel with their job, including aspects like work environment, duties, and compensation.