Which of the below statements is TRUE?
A) A depository institution seeks to earn a positive spread between the assets it invests in (deposits and other sources) and the cost of its funds (loans and securities) .
B) Interest rate risk refers to the risk that a borrower will default on a loan obligation to the depository institution or that the issuer of a security that the depository institution holds will default on its obligation
C) Regulatory risk is the risk that regulators will change the rules so as to adversely impact the earnings of the institution.
D) If the spread will be positive, it will cost the depository institution more to finance the government securities than it will earn on the funds invested in those securities.
Correct Answer:
Verified
Q1: Because of their important role, _ are
Q2: Traditionally, the only assets in which S&Ls
Q3: Depository institutions are _ because of the
Q4: S&Ls invest in short-term assets for _.
A)
Q5: Which of the below statements is FALSE?
A)
Q7: As the structures of S&L balance sheets
Q8: The three sources of funds for banks
Q9: The Garn-St. Germain Act, not only granted
Q10: Risk-based capital guidelines establish a _ weight
Q11: Which of the below statements is FALSE?
A)
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