Business

Business, 25.07.2019 00:00, tanyiawilliams14991

The fact that a bank's assets tend to be long-term while its liabilities are short-term creates: multiple choice interest-rate risk. trading risk. lower risk for the bank, this is why they follow this strategy. credit risk.

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Business, 15.07.2019 00:00, texas101st78

Maturity transformation is the process by which banks a. convert short-term assets into long-term assets. b. transform interest earnings from investments into stockholders' equity. c. transfer long-term liabilities into short-term investments. d. transfer short-term liabilities into long-term investments.

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Business, 26.07.2019 01:40, paulusl19

Firms generally choose to finance temporary current operating assets with short-term debt because matching the maturities of assets and liabilities reduces risk under some circumstances, and also because short-term debt is often less expensive than long-term capital. short-term interest rates have traditionally been more stable than long-term interest rates. a firm that borrows heavily on a long-term basis is more apt to be unable to repay the debt than a firm that borrows short term. the yield curve is normally downward sloping. short-term debt has a higher cost than equity capital.

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Business, 16.10.2019 21:00, heidiburgos1own6c0

Frank barlowe is retiring soon, so he’s concerned about his investments providing him with a steady income every year. he’s aware that if interest ratesincrease , the potential earnings power of the cash flow from his investments will increase. in particular, he is concerned that a decline in interest rates might lead toless annual income from his investments. what kind of risk is frank most concerned about protecting against? reinvestment risk interest rate risk answer the following question based on your understanding of interest rate risk and reinvestment risk. true or false: assuming all else is equal, long-term securities are exposed to higher interest rate risk than short-term securities.

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