If a Bank Has ________ Rate-Sensitive Assets Than Rate-Sensitive Liabilities,then

question 38

Multiple Choice

If a bank has ________ rate-sensitive assets than rate-sensitive liabilities,then a(n) ________ in interest rates will increase bank profits.

• A) more; decline
• B) more; increase
• C) less; increase
• D) both A and C

---

Definitions:

Martingale Effect

A theory in probability suggesting that past events do not influence future ones, often discussed in the context of gambling or investment strategies.

Fad Effect

A temporary period of high demand for a certain product or service, often without a basis in the product's qualities or utility.

Liquidity Effect

The impact that changes in the supply of money have on interest rates, typically where an increase in money supply leads to a decrease in interest rates.

Neglected-firm Effect

The phenomenon where lesser-known or less-followed stocks generate higher abnormal returns than their well-followed counterparts.