For a Bank That Has a Negative Duration Gap, a Decrease

question 35

Multiple Choice

For a bank that has a negative duration gap, a decrease in interest rates will cause a(n) _______ in the economic value of assets that is _______ than the _______ in the economic value of liabilities, and a(n) _______ in the economic value of equity.

• A) increase, less, increase, decrease
• B) increase, greater, increase, decrease
• C) increase, less, decrease, increase
• D) decrease, less, decrease, increase
• E) decrease, greater, decrease, decrease

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Definitions:

Confederates

Individuals who secretly work with researchers to act as part of an experiment's social setting but whose behavior is rehearsed or controlled to manipulate the social context.

In Vivo

In life or in a real-life situation, often used to describe experiments conducted in natural conditions as opposed to a laboratory.

Flooding

Flooding is a behavioral therapy technique for treating phobias and anxiety disorders by exposing the patient to fear-inducing stimuli in a controlled environment to the point of extinguishing the fear response.

In Vivo

A term used in research to refer to experiments or studies conducted in the living organism, as opposed to in vitro or in a laboratory setting.