If the Maturity of a Bank's Assets Is Much Longer

question 27

Multiple Choice

If the maturity of a bank's assets is much longer than the maturity of its liabilities and it wants to limit its interest rate risk, the bank may ________.

• A) prefer to invest in long-term bonds in its asset portfolio
• B) prefer to invest in equities in its asset portfolio
• C) prefer to invest in variable-rate assets
• D) decide to increase its fixed-rate mortgage holdings

---

Definitions:

Consumer-to-Consumer

A type of commerce where private individuals trade goods, services, or information directly with each other, often facilitated by a third-party platform.

Higher-End Product

Goods that are considered of superior quality and higher price, often associated with luxury or premium branding.

Sales Process

A series of steps taken by a company to move a product or service from the initial contact with a potential customer to the final transaction.

Cross-Selling

The practice of suggesting related products or services to a customer who is considering or making a purchase, with the aim of increasing sales.