If a Bank Is Exposed to Refinancing Risk,its Profitability Is

question 34

Multiple Choice

If a bank is exposed to refinancing risk,its profitability is reduced if interest rates ________ and if it is exposed to reinvestment risk,its profitability is reduced if interest rates ________.

• A)rise; fall
• B)rise; rise
• C)fall; rise
• D)fall; fall
• E)rise; stay the same

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Definitions:

Hyperkalemia

A condition characterized by abnormally high levels of potassium in the bloodstream.

Potassium

A chemical element with symbol K and atomic number 19, vital for nerve function, muscle contraction, and maintaining fluid balance in the body.

Acromegaly

A hormonal disorder that develops when the pituitary gland produces too much growth hormone, leading to enlarged bones in hands, feet, and face.

Enlargement

The process of making something larger or more extensive.