One of the Problems in Conducting a Duration Gap Analysis

question 59

Multiple Choice

One of the problems in conducting a duration gap analysis is that the duration gap is calculated assuming that interest rates for all maturities are the same. That means that the yield curve is

• A)flat.
• B)slightly upward sloping.
• C)steeply upward sloping.
• D)downward sloping.

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to update the accounts and ensure they reflect the true financial position of the business.

Summary of Adjustments

Summary of Adjustments is a document or section within financial statements detailing any adjustments made to initial financial records to ensure their accuracy and alignment with accounting principles.

Missing Items

Refers to items that are unaccounted for due to loss, theft, error, or omission in an inventory or collection of assets.

Chart

A visual representation of data designed to make complex information easily understandable at a glance.