If a Bank Attempts to Reduce Exposure to Interest Rate

question 23

Multiple Choice

If a bank attempts to reduce exposure to interest rate risk by replacing long-term marketable securities with more floating-rate commercial loans, it is likely that the bank's

• A)default risk would decrease.
• B)default risk would increase.
• C)liquidity risk would increase.
• D)liquidity risk would decrease.
• E)B and C

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Definitions:

MCR Zone

In programmable logic controllers (PLCs), a Master Control Relay zone, which refers to a section of the program controlled by a master relay for safety or operational purposes.

Subroutine

A set of instructions designed to perform a frequently used operation within a program.

Main Program

The primary set of instructions executed by a computer or an embedded system to perform its intended function.

Energize

The physical application of power to a circuit or device to activate it; the act of setting the on, true, or 1 state of a programmable logic controller’s relay ladder diagram output device or instruction.