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The Performance of a Bank That Continually Concentrates on Short-Term

Question 11

Multiple Choice

The performance of a bank that continually concentrates on short-term deposits in euros and adjustable-rate dollar loans with equal rate sensitivity is


A) unaffected if euro interest rates increase and U.S. rates decrease.
B) unaffected if U.S. interest rates increase and euro interest rates decrease.
C) adversely affected if euro interest rates increase and U.S. rates decrease.
D) adversely affected if U.S. interest rates increase and euro rates decrease.
E) A and B

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