A Thrift Makes Long-Term Fixed-Rate Mortgages Funded with Short-Term Deposits

question 36

Multiple Choice

A thrift makes long-term fixed-rate mortgages funded with short-term deposits and then interest rates rise. Which of the following is true?

• A)Profitability would decline.
• B)Profitability would increase.
• C)The market value of equity increases.
• D)Interest income would fall.
• E)Profitability and market value of equity increase.

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Definitions:

Active Voice

A sentence structure where the subject performs the action stated by the verb, making the writing clear and direct.

Passive Voice

A grammatical voice where the subject is the recipient of the action, often making the sentence less direct.

Shortening Sentences

The practice of making sentences briefer while retaining their original meaning.

Dependent Clause

A part of a sentence that cannot stand alone because it does not express a complete thought.