When interest rates increase the building societies record ________ in the interest costs on their short-term liabilities and ____________ in the interest income of the fixed rate long-term residential loans.

Question

Quizplus · Accepted Answer

When interest rates increase, building societies experience an increase in the interest costs on their short-term liabilities due to higher borrowing costs. However, the interest income from fixed-rate long-term residential loans remains unchanged because the interest rate on these loans is fixed and does not fluctuate with market interest rates.

When Interest Rates Increase the Building Societies Record ________ in the Interest