Banks experience interest rate risk
A) if adverse selection problems are particularly severe.
B) if moral hazard problems are particularly severe.
C) on any investment that has high information costs.
D) if changes in interest rates cause bank profits to fluctuate.
D
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Income inequalities are greatest in
A. Developed countries such as Japan. B. Poor countries such as Namibia. C. Countries with high levels of GDP. D. Rich countries such as the United States.
All of the following statements about open market operations are true EXCEPT:
A) They are used by the Federal Reserve to change the Federal Funds Rate B) They are used by the Federal Reserve to change the discount rate C) They are used by the Federal Reserve to buy and sell mutual funds D) They are used by the Federal Reserve to transact with securities dealers E) They are probably the most influential tool the Federal Reserve has to alter money supply