An FI's Balance Sheet Is Characterized by Long-Term Fixed-Rate Assets

question 48

Multiple Choice

An FI's balance sheet is characterized by long-term fixed-rate assets funded by short-term variable-rate securities. Most likely the bank has a

• A)positive repricing gap and a positive duration gap.
• B)positive repricing gap and a negative duration gap.
• C)negative repricing gap and a positive duration gap.
• D)negative repricing gap and a negative duration gap.

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Definitions:

Placenta

An organ that develops in the uterus during pregnancy, providing oxygen and nutrients to the fetus while removing waste products.

Chorion

Outermost extraembryonic membrane of amniotes; major component of the placenta in placental mammals.

Epidermis

Outermost tissue layer. In animals, the epithelial layer of skin. In plants, the dermal tissue.

Mesoderm

Middle tissue layer of a three-layered animal embryo.