Multiple Choice
Which of the following would be an example of interest rate risk?
A) A bank manager embezzles $1,000,000 from the bank.
B) A bank that loses $500,000 from trading in foreign currencies.
C) A $1,000,000 loan given to a business on which no interest or principal has been collected in 2 years.
D) A bank manager predicts interest rates will rise.However,interest rates fall causing the bank's net income to fall by $250,000.
E) All of the options are examples of interest rate risk.
Correct Answer:
Verified
Correct Answer:
Verified
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