A increase in interest rates means that the discount rate with which cash flows are discounted:

Question

Answer

Increases and thus the present value of a bank's assets and liabilities decreases

Answer

Decreases and thus the present value of a bank's assets and liabilities remains the same

Answer

Decreases and thus the present value of a bank's assets and liabilities increases

Answer

Decreases and thus the present value of a bank's assets and liabilities decreases

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