Which of the following statements does not explain why banks accept some amount of interest rate risk?
A) In their function as intermediaries, banks must necessarily accept some degree of interest rate risk.
B) Banks incur interest rate risk to increase income
C) Banks prefer c red it risk to market risk.
D) If banks failed to take on interest rate risk they would not be able to meet the needs of their deposit and loan customers.

Question

Quizplus · Accepted Answer

The statement that banks prefer credit risk to market risk does not explain why they accept some amount of interest rate risk.

Which of the Following Statements Does Not Explain Why Banks