A Risk a Bank Takes on by Offering Long-Term Fixed

Multiple Choice

A risk a bank takes on by offering long-term fixed interest rate loans is:

A) the loss of real returns due to anticipated inflation
B) the gain that could be made from offering short-term loans
C) the loss of real returns due to an unexpected inflation surprise
D) the gains that could have been made if the money were invested in an alternative asset
E) the loss of customers wanting flexible interest loans