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True or False Questions Note: Please state whether each of the following statements is true or...

True or False Questions
Note: Please state whether each of the following statements is true or false and
provide a short explanation.
3. In Risk adjusted Return on Capital (RAROC) calculation, we use duration model to
assess the loan risk and adjust the interest rate risk of the return.
6. FDIC is an ex-post deposit insurance scheme.

Thank you so much!

Business   Accounting   
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Answer #1

3.FALSE

EXPLANATION:

DURATION MODELS ARE USED TO DESCRIBE THE AMOUNT OF TIME THAT ELAPSES UNTIL A GIVEN EVENT, OR THE LENGTH OF TIME SPENT IN A GIVEN STATE.NOT TO LOAN RISK AND ADJST RATE RISK OF THE RETUTN

6.TRUE

EXPLANATION:

THE FEDERAL DEPOSIT INSURANCE CORPORATION IS ONE OF TWO AGENCIES THAT PROVIDE DEPOSIT INSURANCE TO DEPOSITORS IN U.S. DEPOSITORY INSTITUTIONS, THE OTHER BEING THE NATIONAL CREDIT UNION ADMINISTRATION, WHICH REGULATES AND INSURES CREDIT UNIONS.

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