Is the Bank Exposed to Interest Rate Increases or Decreases

Is the bank exposed to interest rate increases or decreases and why?

A) Interest rate increases because the value of its assets will rise more than its liabilities.
B) Interest rate increases because the value of its assets will fall more than its liabilities.
C) Interest rate decreases because the value of its assets will rise less than its liabilities.
D) Interest rate decreases because the value of its assets will fall more than its liabilities.
E) Interest rate increases because the value of its assets will fall less than its liabilities.

Correct Answer:

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