In a sensitivity analysis using a bank's stock return, an interest rate proxy, and market returns, a ____ coefficient for the interest rate variable suggests that the bank's performance is ____ affected by ____ interest rates.

Question

In a sensitivity  analysis using a bank's stock return, an interest rate proxy, and market returns, a ____ coefficient for the interest rate variable suggests that the bank's performance is ____ affected by ____ interest rates.

Quizplus · Accepted Answer

A negative coefficient for the interest rate variable suggests that the bank's performance is adversely affected by rising interest rates, as higher rates typically increase the cost of borrowing and can reduce profitability.

In a Sensitivity Analysis Using a Bank's Stock Return, an Interest