Is the Bank Exposed to Interest Rate Increases or Decreases

question 15

Multiple Choice

Is the bank exposed to interest rate increases or decreases and why?

• A)Interest rate increases because the value of its assets will rise more than its liabilities.
• B)Interest rate increases because the value of its assets will fall more than its liabilities.
• C)Interest rate decreases because the value of its assets will rise less than its liabilities.
• D)Interest rate decreases because the value of its assets will fall more than its liabilities.
• E)Interest rate increases because the value of its assets will fall less than its liabilities.

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Definitions:

Securities Act

A U.S. law enacted in 1933 that regulates the offer and sale of securities to protect investors against fraud.

Pharma Corporation

A company involved in the development, production, and marketing of pharmaceutical drugs and medications.

Financial Information

encompasses data related to the monetary aspects of an individual or organization, such as assets, liabilities, income, and expenses.

Securities Act

A federal law enacted in 1933 that governs the primary issuance of securities (stocks, bonds) to the public, aiming to ensure transparency and prevent fraud in the securities market.