Duration Analysis Involves Comparing the Average Duration of the Bank's

question 123

Multiple Choice

Duration analysis involves comparing the average duration of the bank's ________ to the average duration of its ________.

• A)securities portfolio;non-deposit liabilities
• B)assets;liabilities
• C)loan portfolio;deposit liabilities
• D)assets;deposit liabilities

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Definitions:

Break-even Point

The point where a business's total costs and total revenues are the same, leading to neither a profit nor a loss.

Total Revenue Line

A graphical representation in break-even analysis that shows how total revenue changes with varying levels of sales volume.

Contribution Margin

The amount of revenue from sales that exceeds variable costs, contributing to covering fixed costs and generating profit.

Variable Expenses

Costs that change in relation to the business’s activity level or volume, similar to variable costs.