39. An asset would normally be classifed as rate-sensitive if A it matures during the examined time period. B it represents a partial principal payment C the outstanding principal changes D All of the above. on a loan can be re-priced when the base rate E a. and c. only 40. Which of the following does not affect net interest income? A B C D Changes in the level of interest rates. Changes in the volume of earning assets. Changes in the portfolio mix of earning assets. The yield curve changing from upward sloping to inverted. E All of the above affect net interest income. f rate-sensitive assets equal $600 million and rate-sensitive liabilities equals $800 million, what is the expected change in net interest income if rates increase by 1%? a. Net interest income will increase by $2 million. b. Net interest income will fall by $2 million. c. Net interest income will increase by $20 million. d. Net interest income will fall by $20 million. e. Net interest income will be unchanged. 41. I 42. A shift from core deposits to non-core deposits will: a. always increase the amount of fixed rate assets b. always increase the amount of rate-sensitive assets. c. generally increase the amount of non-earning assets. d. generally reduce net interest income. e. b. and d. 43. Which of the following does not have an embedded option? a. A callable Federal Home Loan Bank bond. b. Demand deposit accounts. c A home mortgage loan. d. An auto loan. e. All of the above have embedded options