A bank that mismatches its asset and liability maturities is
A) trying to reduce credit risk.
B) willingly accepting greater credit risk.
C) essentially engaging in interest-rate speculation.
D) trying to protect itself against interest rate movements.
C
Economics
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If the annual interest rate is 5%, the net present value of receiving $550 in the next year is:
a. $550 b. $523.80 c. $577.50 d. $500
Economics
Following an expansion of the money supply, a government committed to maintaining a fixed exchange rate must
A. intervene in the foreign exchange market to sell foreign currency and buy domestic currency. B. accept a surplus in its current account. C. increase its level of government expenditure and autonomous investments. D. not use sterilized intervention.
Economics