Second National Bank agreed to pay a high rate of return on long-term certificates of deposit. Shortly after several depositors opted for the long-term CDs, inflation plunged and rates of return dropped. Second National must continue to pay high rates on the long-term CDs even though interest rates have declined significantly. This scenario illustrates:
(a) interest rate risk
(b) currency exchange risk
(c) business risk
(d) commodity price risk
Ans: (a) interest rate risk
Business
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If a stock dividend occurs after year-end, but before issuing the financial statements, a company must restate the weighted-average number of shares outstanding for the year
a. true b. false
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The level of output at which most plant-level scale economies are exhausted is referred to as the maximum efficient scale of output
Indicate whether the statement is true or false.
Business