Answered

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If the value of risk-sensitive assets exceeded that of its liabilities, the bank's profit from the interest rate will:_____

a. Increase
b. Decrease

Sagot :

Martebiidn

Answer:

Increase

Explanation:

The rate of a bank work or performance is mostly acted upon or influenced by the interest payments earned on its assets (loans and investments) relative to the interest paid on its liabilities (deposits). Bank will get profit from increasing interest rates only if the said assets have floating (adjustable) rates.

When the value of risk-sensitive assets is beyond that of its liabilities, the bank would profit from increase in interest rates.

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