The Measure of Interest Rate Risk That Uses the Difference

question 14

Multiple Choice

The measure of interest rate risk that uses the difference between rate-sensitive assets and rate-sensitive liabilities is called

• A) gap measurement.
• B) duration measurement.
• C) duration ratio.
• D) gap ratio.

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Definitions:

Inventory

Items held for sale in the ordinary course of business, as well as supplies and materials used in producing goods for sale.

Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.

Absorption Costing

A pricing strategy that encompasses all expenses associated with production, including direct materials, direct labor, as well as both variable and fixed overhead costs, in the product's price.

Operating Income

A measure of a company's profitability from its core business operations, excluding revenue and expenses from non-operational activities.