If a Bank Had Long-Term Fixed-Rate Assets and Short-Term Liabilities

question 16

Multiple Choice

If a bank had long-term fixed-rate assets and short-term liabilities, and interest rates increased over time, its net interest margin should

• A)decrease.
• B)increase.
• C)stay the same.
• D)either A or B, depending on whether the asset maturities exceed 10 years

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Definitions:

Organizational Development

A domain focused on enhancing individuals' understanding and efficiency in achieving improved organizational transformation and performance through research, theoretical development, and practical application.

Competencies

The skills, knowledge, abilities, and attributes needed to effectively perform a role or job function.

Participative Leadership

A leadership style that encourages and values the input of team members and stakeholders in the decision-making process.

Incentives

are rewards or benefits offered to motivate individuals towards achieving a specific goal or behavior.