Keeping All Other Factors Constant, Banks Can Reduce the Volatility

question 34

Multiple Choice

Keeping all other factors constant, banks can reduce the volatility of net interest income by:

• A)adjusting the dollar amount of rate-sensitive assets.
• B)adjusting the dollar amount of fixed-rate liabilities.
• C)using interest rate swaps.
• D)Bank can reduce volatility of net interest income by doing all of the above.
• E)a.and c.only

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Definitions:

Managerial Succession

The process of transitioning leadership and management roles within an organization to new individuals, often involving planned and strategic steps.

Organizational Stability

The state of being resilient and maintaining equilibrium in an organization's operations, finances, and workforce.

Substitutes For Leadership

Factors in the work environment that provide guidance and incentives to perform, making the leader’s role almost superfluous.

Work Environment

The physical and psychological conditions under which employees perform their job duties.