ACI Dealing Certificate (#303)

Which one of the following statements about interest rate movements is true?

An upward parallel shift of interest rates will cause a loss of income if the rate-sensitivity of a bank’s liabilities is higher than the rate-sensitivity of its assets.
A bank will lose income if it has more rate-sensitive liabilities than rate-sensitive assets.
Falling interest rates will always result in mark-to-market profits on short positions in fixed rate securities.
Rising interest rates can result in mark-to-market losses on fixed-rate assets.