Given That Most Banks Have Positive Gap and Negative Durations,banks

question 97

Multiple Choice

Given that most banks have positive gap and negative durations,banks prefer

• A) lower market interest rates.
• B) higher market interest rates.
• C) higher market fixed rates but lower market floating rates.
• D) either higher or lower market interest rates since interest rates have little effect on bank profits.

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Definitions:

Infinite Population

A theoretical concept where the population size is considered unlimited or endlessly large for statistical analysis.

Sampling Distribution

The probability distribution of a given statistic based on a random sample, which can be used to make inferences about a population.

Central Limit Theorem

A theorem that enables one to use the normal probability distribution to approximate the sampling distribution of x whenever the sample size is large.

Infinite Population

A hypothetical population of unlimited size, often used in statistical modeling to simplify analysis.