If the Spread Effect Is Zero and All Interest Rates

question 7

Multiple Choice

If the spread effect is zero and all interest rates decline 50 basis points, the bank's NII will change by ________________ over the year.

• A) $0
• B) $400,000
• C) -$400,000
• D) $700,000
• E) -$700,000 140 million x -0.0050 = -$700,000

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Definitions:

Evaluation

The systematic assessment of processes, projects, or performances to determine their effectiveness, quality, or value.

Emotional Labor

The method of controlling emotions and expressions to meet a job's emotional demands.

Deep Acting

The process of managing one's emotions by consciously trying to feel the emotion one is required to display, as opposed to simply faking the external signs of the emotion.

Surface Acting

The technique of disguising one's inner feelings to display emotions that are expected in a given situation, often used in professional settings.