During a Period of Rising Interest Rates, a Bank's Net

question 15

Multiple Choice

During a period of rising interest rates, a bank's net interest margin will likely ____ if its liabilities are ____ its assets.

• A)increase; more rate sensitive than
• B)decrease; more rate sensitive than
• C)increase; equally rate sensitive as
• D)decrease; equally rate sensitive as

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Definitions:

Income

Income refers to the earnings received regularly from employment or investment sources.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, typically downward sloping, indicating that as price decreases, demand increases.

Complement

A good or service that is used together with another good or service, which increases the demand for each other.

Financing

The process of providing or obtaining the funds necessary for investment, purchase, or undertaking a project.