When borrowers tend to pay back the loans to bankers earlier, the bank is facing a. Repricing risk O b. Yield curve risk O c. Basis points risk d. Embedded options risk

Q: What differences between the daily market valuation of a traditional security and the valuation…

A: There is need of proper valuation of security there many methods of valuation.

Q: Which of the following actions cannot be used by banks to increase reserves? A. Sell Treasury…

A: Reserves  are parts of the income of a corporation that have been set aside to improve the financial…

Q: decrease in reserve requirements could lead to an    A. increase in bank lending.   B. increase…

A: The Money supply and demand of money is affected by reserve requirement of bank which are placed by…

Q: Having longer-maturity assets than liabilities causes banks to bear which of the following risks? I.…

A: a risk is an uncertain event that will occur or non-occurring and implies future uncertainty and…

Q: Which of the following statements is false?   A.   Funding risk is the risk that a firm will not…

A: The concept of risk is linked to the uncertainty of future occurrences that may or may not occur.…

Q: The financial performance of both Commercial Banks and Savings Banks is measured using the Net…

A: The net interest margin is referred as the net benefit of lending which derived from the lending and…

Q: nterest rate swaps and gap analysis to manage interest rate risk.

A: There are two methods in which a bank can manage its interest rate risk  (a) by matching the…

Q: Systemic risk is a) credit risk. b) an insurance contract against the default of one or more…

A: Systemic risk refers to the risk of widespread disruption or collapse of an entire financial system…

Q: how do banks improve their net profit margin to increase Return on Equity?

A: Return on Equity (ROE) measures the company’s net income to the value of its total shareholders’…

Q: Value at Risk (VaR) is a statistical measure of maximum loss used by banks and other financial…

A: Value at Risk is a technique used by institutions to analyze the potential risk assessed in the…

Q: Which liquidity risk measurement strategy is best for a financial institution to take when is unable…

A: Current liabilities refer to the short-term debt obligation of a company which includes creditors,…

Q: A fundamental analyst uses the discounted cashflow method to value firms, and has a short-term…

A: Fundamental Analysis is a technique to value firms on the basis of their fundamentals i.e. their…

Q: Credit analysts are likely to consider which of the following in making a rating recommendation?A .…

A: Credit analysts are professionals who are appointed by credit rating agencies or any investment…

Q: Which of the following is a characteristic of a money market financial instrument?

A: Money market financial instruments are those instruments which have short maturity period of up to a…

Q: Define the Credit Risk and include in your discussion examples of the Credit Risk and why Financial…

A: A large number of financial transactions take place in the financial system and each transaction…

Q: If a bank has , rate-sensitive assets than liabilities, then in interest rates will increase bank…

A: Lets understand the meaning of rate sensitive asset and liabilities. Rate sensitive asset and…

Q: Interest costs for short-term debt are generally lower than interest costs for long-term debt…

A: Companies and people use debt to tide over liquidity problems or to get access to funds to buy…

Q: The average maturity of its assets is larger than that of its deposits, as is typical of most banks.…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Which of the following best explains an upward sloping Treasury yield curve? A. Maturity risk is…

A: Treasury yield curves represents the interest rate and maturity of treasury securities relationship…

Q: When both deposit and loan interest rates increase at the same speed in the market, a bank tends to…

A: When both deposit rates and lending rates increase the bank tends to make profit out of this. Always…