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:

Product Development

The complete process of bringing a new product or service to market, from concept through design, creation, and introduction.

Aggregate Planning

Refers to the process of determining optimal production, inventory, and workforce levels to meet demand over a medium-range time horizon, typically covering 3 to 18 months.

Workforce Variation

The changes or fluctuations in the size or composition of an organization's workforce due to factors such as hiring, turnover, or seasonal demand.

Hiring

The process of finding and recruiting people to fill job positions within a company or organization.