Interest Rate Risk Is the Risk Incurred by an FI

question 70

True/False

Interest rate risk is the risk incurred by an FI when the maturities of its assets and liabilities are mismatched.

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Definitions:

Security Needs

The requirement to protect a nation, organization, or individual from various threats, including cyber attacks, terrorism, and theft.

Required Reserve Ratio

The ratio of reserves to deposits that banks are obligated by regulation to hold.

Excess Reserves

Bank reserves exceeding required reserves

Checkable Deposits

Funds kept in bank accounts that can readily be withdrawn by writing a check or using a debit card, making them a highly liquid form of money.