Bank Capital Will Decline Following an Increase in Interest Rates

question 139

Multiple Choice

Bank capital will decline following an increase in interest rates if the value of its

• A) fixed-rate assets is greater than the value of its fixed-rate liabilities.
• B) fixed-rate assets is less than the value of its fixed-rate liabilities.
• C) fixed-rate assets is greater than the value of its variable-rate assets.
• D) fixed-rate liabilities is greater than the value of its variable-rate liabilities.

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Definitions:

Division

A process in mathematics of distributing a group of things into equal parts or a method in logic of breaking down categories into smaller subcategories.

Hasty Generalization

A fallacy where a conclusion is not logically justified by sufficient or unbiased evidence.

Fallacy of Logical Structure

A type of logical error where an argument's structure is flawed, leading to invalid conclusions.

Immortal

Describes an entity or being that is not subject to death, possessing eternal life or existence.