Banks can protect themselves against an unexpectedly high rate of loan defaults and against the risk of ____________________ by adopting a strategy that will ______________.
A. rising interest rates; diversify its loans
B. rising interest rates; provide loans to a variety of customers
C. an increased reserve requirement; provide loans to a variety of customers
D. an asset-liability time mismatch; diversify its loans
Answer:D
Banks can protect themselves against an unexpectedly high rate of loan defaults and against the risk of ____________________ by adopting a strategy that will ______________.
A. rising interest rates; diversify its loans B. rising interest rates; provide loans to a variety of customers C. an increased reserve requirement; provide loans to a variety of customers D. an asset-liability time mismatch; diversify its loans
Explanation: Type: Multiple Choice