Thrift institutions that specialize in mortgage investments and borrow short and lend long are risky

Indicate whether the statement is true or false


T Such mortgage lenders are committed to long rates of interest which they finance with short-term funds, so if short-term rates rise they can lose money.

Economics

You might also like to view...

Refer to the table above. Which of the following statements is true?

A) There is a surplus of 10 notebooks in the market when the price of one notebook is $8. B) There is a shortage of 4 notebooks in the market when the price of one notebook is $6. C) There is a shortage of 12 notebooks in the market when the price of one notebook is $4. D) There is a surplus of 4 notebooks in the market when the price of one notebook is $5.

Economics

When applying for a loan, a borrower tends to know more about her ability to pay it back than does the bank. This is an example of

a. perfect information b. moral hazard c. a low marginal benefit of information for the bank d. asymmetric information e. optimal search

Economics

Which of the following is considered a financial intermediary?

a. The Federal Reserve b. A bankruptcy court c. The U.S. Department of Commerce d. A credit union e. A foreign exchange

Economics

When determining inflation, the price level in each period is typically reported as an index number, rather than as the _______________ amount for buying the basket of goods.

a. total b. relative c. dollar d. combined

Economics