Assume an FI Has $50 000 in Assets and $45

question 68

Multiple Choice

Assume an FI has $50 000 in assets and $45 000 in liabilities.Which of the following statements is true if interest rates on both assets and liabilities increase simultaneously?

• A)As the interest rate for both assets and liabilities increase the value of the FI's net worth will remain constant.
• B)As the interest rate for both assets and liabilities increase the value of the FI's assets and liabilities will both decrease.
• C)As the interest rate for both assets and liabilities increase the value of the FI's assets and liabilities will both increase.
• D)As the interest rate for both assets and liabilities increase the value of the FI's assets and liabilities will both increase; however, as the FI has more assets than liabilities, the increase in the value of the FI's assets will be greater than the increase in the value of its liabilities.

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Definitions:

Echolalia

The automatic and involuntary repetition of sounds or words spoken by others, often observed in individuals with autism and certain speech disorders.

Speech Development

The process by which children learn to communicate and express themselves through spoken language, involving a sequence of stages that typically begins with babbling and progresses to the formation of words and sentences.

First Word

Typically a significant developmental milestone in early childhood, marking the beginning of expressive language and verbal communication.

First Words

The initial stages of verbal language development in children, marked by the utterance of single words that convey simple concepts or desires.