1) (A) In a bank's three-month maturity horizon, a 30-year mortgage with a rate reset in 6 months would be considered a fixed-rate asset, but in its one-year maturity horizon, this mortgage would be considered a rate-sensitive asset (RSA). (B) A rate-sensitive asset is one that either matures within the maturity buckets or one that will have a payment/interest rate change within the maturity bucket if market interest rates change.

a. (A) is true, (B) false.

b. (A) is false, (B) true.

c. Both are true.

d. Both are false

2) (A) The weighted average maturity of a debt security's stream of cash flow is called duration. (B) The duration of a portfolio is the weighted average of the durations of each individual securities, with the weights reflecting the proportion of the portfolio invested in each.

a. (A) is true, (B) false.

b. (A) is false, (B) true.

c. Both are true.

d. Both are false