A US Bank Has Fixed-Rate Assets in US Dollars and Variable-Rate

question 90

Multiple Choice

A US bank has fixed-rate assets in US dollars and variable-rate liabilities in Euros.This bank is exposed to

• A)interest rate increases and an appreciation of the dollar.
• B)interest rate declines and an appreciation of the dollar.
• C)interest rate increases and a depreciation of the dollar.
• D)interest rate declines and a depreciation of the dollar.
• E)zero exposure to interest rate and exchange rate exposures.

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Definitions:

Technetium

A radioactive chemical element with symbol Tc and atomic number 43, noteworthy for being the first element to be artificially produced.

Continuous Spectrum

A type of emission spectrum showing an uninterrupted band of colors from red to violet, typically emitted by an incandescent solid, liquid, or gas under pressure.

Wavelengths

The distance between consecutive peaks (or troughs) in a wave, often used in the context of electromagnetic radiation.

Ground State

The lowest energy state of an atom or other particle, which is the most stable and preferred configuration.