Off-balance-sheet activities
A) generate fee income with no increase in risk.
B) increase bank risk but do not increase income.
C) generate fee income but increase a bank's risk.
D) generate fee income and reduce risk.
C
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In the case of public goods, the ability to free ride on the efforts of others is an example of
A) low transactions costs. B) insecure property rights. C) government subsidization. D) mutual assurance.
Suppose the market for autoworkers is initially in equilibrium, but then the automakers purchase capital goods that are a substitute for workers. What happens in the market for autoworkers?
A) The equilibrium wage rate will increase and the equilibrium quantity of labor will decrease. B) The equilibrium wage rate and the equilibrium quantity of labor will both increase. C) The equilibrium wage rate and the equilibrium quantity of labor will both decrease. D) The equilibrium wage rate will decrease and the equilibrium quantity of labor will increase.
The analysis of Friedman and Phelps argues that an expected change in inflation has no impact on the unemployment rate
a. True b. False Indicate whether the statement is true or false
You put money into an account and earn a real interest rate of 5 percent. Inflation is 2 percent, and your marginal tax rate is 35 percent. What is your after-tax real rate of interest?
a. 5.25 percent b. 3.05 percent c. 2.55 percent d. 1.25 percent