4. In general, under which of the following condition would a bank consider hedging interest rate...
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4. In general, under which of the following condition would a bank consider hedging interest rate risk rather than remaining unhedged? a. If it has a negative $GAP and if it expects interest rates to increase b. If it has a positive $GAP and if it expects interest rates to increase c. Both of the above d. Neither a or b 5. Which of the following is (are) correct (in general)? a. Overall, finance companies are not susceptible to unexpected deposit withdrawals (as are commercial banks). b. The loan delinquency rate of finance companies is typically lower than that of other lending financial institutions. c. Both of the above d. Neither a or b 6. In general, which of the following is (are) correct for private placement of bonds compared to public offering? a. Issuer avoids SEC registration expenses b. Issuer may receive more in price, resulting in lower financing cost c. Both of the above d. Neither a or b 4. In general, under which of the following condition would a bank consider hedging interest rate risk rather than remaining unhedged? a. If it has a negative $GAP and if it expects interest rates to increase b. If it has a positive $GAP and if it expects interest rates to increase c. Both of the above d. Neither a or b 5. Which of the following is (are) correct (in general)? a. Overall, finance companies are not susceptible to unexpected deposit withdrawals (as are commercial banks). b. The loan delinquency rate of finance companies is typically lower than that of other lending financial institutions. c. Both of the above d. Neither a or b 6. In general, which of the following is (are) correct for private placement of bonds compared to public offering? a. Issuer avoids SEC registration expenses b. Issuer may receive more in price, resulting in lower financing cost c. Both of the above d. Neither a or b
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4C Both of the above A bank may consider hedging interest rate risk if it has a negative SGAP which indicates that it is paying more interest on its d... View the full answer
Related Book For
Introduction to Financial Accounting
ISBN: 978-0133251036
11th edition
Authors: Charles Horngren, Gary Sundem, John Elliott, Donna Philbrick
Posted Date:
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