13-60 When an FI Pre?commits to Lending at a Fixed

question 7

Multiple Choice

13-60 When an FI pre?commits to lending at a fixed rate,it is exposed to

• A)credit risk.
• B)interest rate risk.
• C)takedown risk.
• D)funding risk.
• E)exchange rate risk.

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Definitions:

Cohabitation

The state of living together and sharing a domestic life without being married.

United States

A country located primarily in North America, consisting of 50 states and a federal district.

Europe

A continent located entirely in the Northern Hemisphere and mostly in the Eastern Hemisphere, comprising various countries and cultures.

U.S. Marriages

The legally or formally recognized union of two people as partners in a personal relationship, within the cultural and legal framework of the United States.