Select all that are true reagrding market risk for a bank. Adverse changes in the relative strength of the business cycle (GDP) negatively impact the investment portfolio, which acts as a hedge to the lending side of the business thus creating market risk. Market risk includes unexpected events such as COVID. Since monetary policy has a macro economic effect it does not change overall market risk for the bank.
Select all that are true reagrding market risk for a bank. Adverse changes in the relative strength of the business cycle (GDP) negatively impact the investment portfolio, which acts as a hedge to the lending side of the business thus creating market risk. Market risk includes unexpected events such as COVID. Since monetary policy has a macro economic effect it does not change overall market risk for the bank.
Chapter15: Money Creation
Section: Chapter Questions
Problem 17SQ
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Select all that are true reagrding market risk for a bank.
Adverse changes in the relative strength of the business cycle ( |
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Market risk includes unexpected events such as COVID. |
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Since |
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The level and target of fiscal policy changes the bank's market risk. |
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International markets have little to no effect on U.S. banking institutions. |
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