ACI
3I0-012 · Question #482
Which of the following statements does not explain why banks accept some amount of interest rate risk?
The correct answer is C. Banks prefer c red it risk to market risk. See the full explanation below for the reasoning.
Question
Which of the following statements does not explain why banks accept some amount of interest rate risk?
Options
- AIn their function as intermediaries, banks must necessarily accept some degree of interest rate risk.
- BBanks incur interest rate risk to increase income
- CBanks prefer c red it risk to market risk.
- DIf banks failed to take on interest rate risk they would not be able to meet the needs of their deposit
How the community answered
(23 responses)- A17% (4)
- B9% (2)
- C70% (16)
- D4% (1)
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