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.
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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.
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
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
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