Because credit unions' sources and uses of funds are generally interest rate ____, movements in interest revenues and interest expenses of credit unions are ____.
A)sensitive; negatively correlated
B)insensitive; highly correlated
C)sensitive; uncorrelated
D)sensitive; highly correlated
E)insensitive; uncorrelated

Question

Quizplus · Accepted Answer

Credit unions' sources and uses of funds are generally interest rate sensitive, meaning both their interest revenues (from loans and investments) and interest expenses (on deposits and borrowings) tend to move in the same direction with changes in interest rates, making them highly correlated.

Because Credit Unions' Sources and Uses of Funds Are Generally