Which of the following statements is true?
A) An increase in interest rates leads to an increase in the market value of financial securities.
B) Value of longer term securities decreases at a diminishing rate for increases in interest rates.
C) Value of longer term securities increases at an increasing rate for any decline in interest rates.
D) The shorter the maturity of a fixed income asset or liability, the greater the fall in market value for any given interest rate increase.
E) The longer the maturity of a fixed income asset or liability, the greater the fall in market value for any given interest rate decrease.
Correct Answer:
Verified
Q75: The repricing model measures the impact of
Q76: The repricing model ignores information regarding the
Q77: If the chosen maturity buckets have a
Q78: An increase in interest rates
A)increases the market
Q79: What is spread effect?
A)Periodic cash flow of
Q81: What is the weighted average maturity of
Q82: Total one-year rate-sensitive assets is
A)$540 million.
B)$580 million.
C)$555
Q83: The gap ratio is
A).015.
B)-.015.
C).025.
D)-.144.
E).154.
[Reference: 8-84]
Q84: Total one-year rate-sensitive liabilities is
A)$540 million.
B)$580 million.
C)$555
Q85: What is the weighted average maturity of
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