When a DI Makes a Shift from an "Originate-To-Hold" Banking

question 31

Multiple Choice

When a DI makes a shift from an "originate-to-hold" banking model to an "originate-to-distribute" model, the change is likely to result in

• A)increased operating costs.
• B)increased interest rate risk.
• C)increased liquidity risk.
• D)decreased monitoring costs.
• E)decreased fee income.

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Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, reflecting the value of all goods and services produced by an economy in a given year in real terms.

GDP Deflator

An economic measure that accounts for inflation by converting output measured at current prices into constant-dollar GDP.

Net Domestic Product

A measure of a nation's total economic output, adjusted for depreciation; it is the gross domestic product (GDP) minus the depreciation on a country’s capital goods.

National Income

The total amount of money earned within a country from the production of goods and services over a specified period, usually a year.