If the Spread Between Rate-Sensitive Assets and Rate-Sensitive Liabilities Increases

question 22

True/False

If the spread between rate-sensitive assets and rate-sensitive liabilities increases for a bank, future changes in interest rates will lead to an increase in net interest income.

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Definitions:

Organizational Goals

Objectives or targets that an organization aims to achieve, which guide its operational and strategic planning.

Reinforcement Theory

A theory in psychology that suggests behavior is motivated by its consequences, with reinforcements used to either increase or decrease the likelihood of a behavior’s occurrence.

Motivate Employees

The process of encouraging and inspiring workers to improve their performance or to achieve specific goals through various strategies and incentives.

Expectancy Theory

Expectancy Theory is a motivational theory that suggests an individual’s behavior is determined by their expected outcomes and the attractiveness of those outcomes.