Which of the Following Will Not Affect a Bank's Duration

question 9

Multiple Choice

Which of the following will not affect a bank's duration estimate for the year?

• A) Prepayments on loans that exceed expectations.
• B) A 20-year corporate bond that is unexpectedly called in 6 months.
• C) Certificates of deposit that are withdrawn early.
• D) Holding a 30-year Treasury bond until maturity.
• E) All of the above will affect a bank's estimated duration for the year.

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Definitions:

Attractive Victims

Refers to victims who are perceived more sympathetically or favorably due to their physical appearance or charm.

Mood Affect

Relates to the range of feelings or expressed emotions that can influence an individual's perception of the world and behavior.

Helping

The act of providing assistance or support to others, often to alleviate their distress or meet their needs.

Belief in a Just World

The cognitive bias leading individuals to assume that people get what they deserve, thereby justifying suffering and success alike.