| Question |
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| Explain the type(s) of risk Lafayette Bank takes in the following examples. a. Lafayette Bank extends a one-year loan to Joe Johnson to purchase a new washer and dryer for his home. b. Lafayette Bank extends a 30-year, fixed-interest-rate loan to Joe Johnson for the purchase of a new home. c. Lafayette Bank extends a 30-year, floating-interest-rate loan to Joe Johnson for the purchase of a new home. d. Lafayette Bank purchases $100,000 in 10-year government bonds. e. Lafayette Bank purchases $200,000 in 10-year municipal bonds. |
