A Bank That Expects Interest Rates to Fall Will

question 33

Multiple Choice

A bank that expects interest rates to fall will

• A)want the duration of its assets to be greater than the duration of its liabilitiesa positive duration gap.
• B)want the duration of its assets to be less than the duration of its liabilitiesa positive duration gap.
• C)want the duration of its assets to be greater than the duration of its liabilitiesa negative duration gap.
• D)want the duration of its assets to be less than the duration of its liabilitiesa negative duration gap.

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Definitions:

Fosters Dependency

Encouraging a reliance or strong need for support, assistance, or control by another individual or group, potentially hindering independence.

Superiority Position

A stance or situation in which an individual or group considers themselves better or more important than others, often leading to social hierarchies.

Creative Thinking

A thought process involving innovation, uniqueness, and the ability to generate new ideas or solutions.

Denial

A psychological defense mechanism wherein an individual refuses to accept reality or facts, thus blocking external events from awareness.