A Method of Measuring the Interest Rate or Gap Exposure

question 35

Multiple Choice

A method of measuring the interest rate or gap exposure of an FI is

• A)the duration model.
• B)the maturity model.
• C)the repricing model.
• D)the funding gap model.
• E)All of the options.

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Definitions:

Drive-Reduction

A theory in psychology that posits that behavior is motivated by the need to reduce internal drives or tensions, such as hunger or thirst.

Internal Physical States

Internal Physical States refer to the physiological conditions or feelings within the body, such as hunger, pain, or fatigue, that can influence emotions and behavior.

Arousal

A state of alertness and mental and physical activation.

Incentive

An external stimulus that motivates behavior (for example, money or fame).