A Bank That Has Made Floating Rate Loans Funded by Longer

question 19

True/False

A bank that has made floating rate loans funded by longer maturity deposits is at risk from falling interest rates.

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Definitions:

Petroleum

A natural, flammable liquid found in the Earth's formations, composed of a complex mixture of hydrocarbons and used primarily as fuel.

Opportunity Cost

The value of the best alternative forgone when a decision is made to pursue a particular course of action.

Machinery

Mechanical devices or equipment used in various industries to perform tasks more efficiently than manual labor.

Petroleum

A naturally occurring liquid found beneath the Earth's surface that can be refined into fuel and various chemical products.