A Savings and Loan Has Extremely Long-Term Assets That Are

Multiple Choice

A savings and loan has extremely long-term assets that are currently matched against extremely short-term liabilities. For this S&L:

A) falling interest rates will decrease the value of its equity.
B) falling interest rates will increase the value of its equity.
C) rising interest rates will increase the value of its equity.
D) rising interest rates will decrease the value of its equity.
E) Both falling interest rates will increase the value of its equity; and rising interest rates will decrease the value of its equity.