9-3 The difference between the changes in the market value of the assets and market value of liabilities for a given change in interest rates is,by definition,the change in the FI's net worth.

Question

Quizplus · Accepted Answer

This statement is true. The market value of assets and liabilities of a financial institution are sensitive to changes in interest rates. The difference between the market value of assets and liabilities is the net worth of the institution. Therefore, the change in the net worth of an FI is equal to the difference between the changes in the market value of its assets and liabilities due to interest rate changes.

9-3 the Difference Between the Changes in the Market Value