Which of the following statements is false?
A)A major reason for cheque accounts to be included in an FI's interest-sensitive liabilities is that the majority of these accounts are core deposits.
B)Cheque accounts should be treated as interest-sensitive liabilities because if interest rates rise, deposits might be withdrawn and thus will need to be replaced by higher-yielding deposits.
C)The final decision whether or not to include cheque accounts as rate-sensitive liabilities must be made after an analysis of the actual deposit history.
D)None of the listed options are correct.

Question

Quizplus · Accepted Answer

Cheque accounts are considered interest-sensitive liabilities not primarily because they are core deposits, but because their balances can be sensitive to changes in interest rates, affecting the flow of funds into or out of these accounts. Core deposits refer to the stable and less expensive source of funding for banks, but the sensitivity to interest rate changes is a separate consideration.

Which of the Following Statements Is False