If the Currency Mix of a Bank's Assets Is Similar

question 10

True/False

If the currency mix of a bank's assets is similar to that of its liabilities and the overall rate sensitivity of its assets and liabilities is similar, interest rate risk is completely nonexistent.

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Definitions:

Rationalization

A defense mechanism in which controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner to avoid the true explanation.

Corporation

A corporation is a legal entity that is separate from its owners, providing them with limited liability. It is capable of owning assets, borrowing money, and being sued or suing.

Conflict

A struggle or contest between people with opposing needs, ideas, beliefs, values, or goals.

Mediate

To intervene in a dispute in order to resolve it or bring about a settlement.