The larger the size of an FI, the larger the _________ from any given interest rate shock.
A)duration mismatch
B)immunization effect
C)net worth exposure
D)net interest income
E)risk of bankruptcy

Question

Quizplus · Accepted Answer

The larger the size of a Financial Institution (FI), the larger the net worth exposure from any given interest rate shock. This is because a larger FI typically has more assets and liabilities that can be affected by changes in interest rates, impacting its net worth.

The Larger the Size of an FI, the Larger the _________