The sensitivity of the cost of funds to interest rate movements has generally been
A)greater for credit unions than for savings institutions.
B)greater for credit unions than for commercial banks.
C)lower for credit unions than for savings institutions or commercial banks.
D)similar for credit unions as for savings institutions and commercial banks.

Question

Quizplus · Accepted Answer

Credit unions typically have a lower sensitivity to interest rate movements compared to savings institutions or commercial banks. This is because credit unions often have a more stable and loyal customer base, leading to more consistent deposit levels, and they may also have a higher proportion of non-interest-bearing accounts or lower-cost sources of funds.

The Sensitivity of the Cost of Funds to Interest Rate