Interest rates are very diffic… Show more Banks are expose

Interest rates are very diffic… Show more Banks are exposed to interest rate risk primarily because: (a) Interest rates are very difficult to forecast. (b) Borrowers from banks are prone to default. (c) Depositors withdraw their money from banks when interest rates fall. (d) The maturities of bank’s assets and liabilities differ. The Federal funds market involves: (a) The tax revenues of the Federal government. (b) Loans by the Federal Reserve to banks. (c) Loans by banks to the Federal Reserve. (d) A market for loans made between banks. • Show less

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