A Bank's Net Interest Margin Will Likely Decline If It

question 3

Multiple Choice

A bank's net interest margin will likely decline if it has a large amount of

• A)rate-sensitive assets and no rate-sensitive liabilities.
• B)rate-sensitive liabilities and no rate-sensitive assets.
• C)loans to technology firms.
• D)real estate loans.

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Definitions:

Land Rent

The payment made for the use of land or real estate, typically based on the value and location of the land.

Substitution

The act of replacing one item or choice with another due to differences in price, availability, or quality, influencing consumer behavior and market dynamics.

Productive Resources

The resources utilized in the creation of products and services, such as land, workforce, funds, and entrepreneurial skills.