If a Bank Has Short-Term Deposits and Provides Long-Term Fixed-Rate

question 16

Multiple Choice

If a bank has short-term deposits and provides long-term fixed-rate loans, and interest rates decline over time, its net interest margin should be

• A)declining over time.
• B)rising over time.
• C)constant over time.
• D)consistently negative.

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Definitions:

Beta Wave

A type of brainwave pattern associated with active, alert cognition and wakefulness.

Alpha Wave

Brain waves detected by an electroencephalogram that indicate a state of relaxation or calmness, typically present when a person is awake but relaxed.

Theta Wave

A type of brainwave pattern associated with sleep, deep relaxation, and some stages of meditation, usually in the frequency range of 4-8 Hz.

Delta Wave

The slowest type of brain wave, characteristic of deep sleep and indicative of restorative, unconscious processing.