An FI that finances long-term fixed rate mortgages with short-term deposits is exposed to
A. increases in net interest income and decreases in the market value of equity when interest rates fall.
B. decreases in net interest income and decreases in the market value of equity when interest rates fall.
C. decreases in net interest income and decreases in the market value of equity when interest rates rise.
D. increases in net interest income and decreases in the market value of equity when interest rates rise.
E. increases in net interest income and increases in the market value of equity when interest rates rise.
Answer: C. decreases in net interest income and decreases in the market value of equity when interest rates rise.
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The errors in a particular forecast are as follows: 4, -3, 2, 5, -1. What is the tracking signal of the forecast?
A) 0.4286 B) 2.3333 C) 5 D) 1.4 E) 2.5
Which of the following is not a recommended guideline for writing a business plan?
A) To make the best impression, a business plan should follow an unconventional structure and stand out in some dramatic way. B) A business plan needs to project a sense of anticipation and excitement about the possibilities that surround a new venture. C) For most plans, 25 to 35 pages is sufficient. D) A business plan should look sharp, but not a lot of money should be spent on the physical appearance of the plan. E) Shy away from using a lot of boldfaced type, italics, clip art, and different font sizes and colors when preparing a business plan.