To Increase Asset Sensitivity, a Bank Can

question 22

Multiple Choice

To increase asset sensitivity, a bank can:

• A) buy longer-term securities.
• B) pay premiums on subordinated debt.
• C) shorten loan maturities.
• D) make more fixed rate loans.
• E) All of the above.

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Definitions:

Sale

A transaction between two parties where the buyer receives goods, services, or assets in exchange for money or other forms of compensation.

Issuing Bonds

The process of a borrower offering bonds to investors as a form of debt securities to raise capital.

Discount

A reduction in the price of goods or services offered by a seller, or the amount by which a bond is sold below its par value.