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1. A bank has assets of $1 million that mature in 5 years and liabilities of $1 million that mature in 10 years where interest rates (fixed rate) are 5.5% on assets and 5% on liabilities. Suppose interest rates decrease in 5 years when the assets mature. Which of the following is most accurate (assuming a 10 year time horizon)?
   1. The bank benefits because it is cheaper to borrow now and assets remain at the same rate
   2. The bank suffers because it must reinvest assets at a lower rate while liabilities remain at the same rate
   3. There is no impact because interest rates move for both assets and liabilities
2. A bank has assets of $5 million that mature in 3 years and liabilities of $5 million that mature in 2 years where interest rates (fixed rate) are 7% on assets and 6% on liabilities. Suppose interest rates decrease in 2 years when the liabilities mature. Which of the following is most accurate (assuming a 3 year time horizon)?
   1. The bank benefits because it is cheaper to borrow now and assets remain at the same rate
   2. The bank suffers because it must reinvest assets at a lower rate while liabilities remain at the same rate
   3. There is no impact because interest rates move for both assets and liabilities
3. Which of the following is NOT part of the Dodd-Frank Wall Street Reform and Consumer Protection Act?
   1. Increased oversight of credit ratings agencies
   2. Stricter rules for banks on capital, liquidity, and risk management
   3. Ban on use of all derivatives by commercial banks
   4. More transparency in the over-the-counter derivatives market and having more derivatives (like CDS) trade on exchanges
   5. Creation of the Financial Stability Oversight Council