Which of the Following Is a Measure for Banks to Use

question 8

Multiple Choice

Which of the following is a measure for banks to use to assess their exposure to interest rate risk?

• A)capital ratio
• B)leverage measure
• C)duration
• D)gap ratio
• E)duration AND gap ratio

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Definitions:

Profitability

A measure of the efficiency and effectiveness of a company in generating profit relative to its revenue or investments over a specific period.

Manager

An individual responsible for controlling or administering an organization or group of staff.

Budget Performance Reports

Periodic reports comparing budgeted amounts to actual amounts for a specific period, and the analysis of variances to make informed financial management decisions.

Vice President

An officer in government or business who is below a president in rank, responsible for specific departments or functions.