Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Given a 6 month time-frame, which of the following assets is not rate sensitive? A.) Three-month T-bill. B.) Federal Funds Sold (daily repricing). C.)

1. Given a 6 month time-frame, which of the following assets is not rate sensitive?

A.) Three-month T-bill.

B.) Federal Funds Sold (daily repricing).

C.) Two year Treasury bond with annual coupon payments.

D.) Four-year fully amortized car loan with $350 monthly payments including both principal and interest.

2.) Holding all other bank characteristics constant, if the bank triples in size, what happens to net interest income?

A.) Net interest income will not change.

B.) Net interest income will double.

C.) Net interest income will triple.

D.) There is no fixed relationship between changes in bank size and net interest income.

3.) Which of the following are likely to occur when interest rates fall sharply?

A.) Fixed-rate loans are refinanced.

B.) Deposits are withdrawn early.

C.) All of the above occur when interest rates fall sharply.

D.) None of the above occur when interest rates fall sharply.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Understanding Healthcare Financial Management

Authors: Louis C. Gapenski, George H. Pink

6th Edition

1567933629, 9781567933628

More Books

Students also viewed these Finance questions