Which of the following situations pose a refinancing risk for an FI?
A. An FI issues $10 million of liabilities of one-year maturity to finance the purchase of $10 million of assets with a two-year maturity.
B. An FI issues $10 million of liabilities of two-year maturity to finance the purchase of $10 million of assets with a two-year maturity.
C. An FI issues $10 million of liabilities of three-year maturity to finance the purchase of $10 million of assets with a two-year maturity.
D. An FI matches the maturity of its assets and liabilities.
E. All of the above
Ans: A. An FI issues $10 million of liabilities of one-year maturity to finance the purchase of $10 million of assets with a two-year maturity.
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Which one of the following statements is correct?
A) An investor's level of risk tolerance is determined strictly by the investor's age. B) An investor's risk tolerance is affected by his or her family situation. C) The less money invested and the younger the investor, the lower the level of risk tolerance. D) Investors with high levels of risk tolerance will primarily invest in U.S. Treasury securities. E) The lower your level of risk tolerance, the higher you will move up the investment pyramid when selecting investments.
Hayden's school's basketball team just beat their in-state rival. Afterwards Hayden feels a strong sense of belonging to his university and purchases a new shirt with the team's logo to show off that he is a member of that university. Hayden is demonstrating ___________.
a. Galatea effect b. social identity c. stereotype d. impression management