Measuring the Sensitivity of Bank Profits to Changes in Interest

question 29

Multiple Choice

Measuring the sensitivity of bank profits to changes in interest rates by multiplying the gap for several maturity subintervals times the change in the interest rate is called

• A)basic gap analysis.
• B)the maturity bucket approach to gap analysis.
• C)the segmented maturity approach to gap analysis.
• D)the segmented maturity approach to interest-exposure analysis.

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Definitions:

Net Operating Income

The profit a company generates from its operations, excluding taxes and interest.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a specific period, including materials, labor, and overhead costs.

Accounting Records

Documentation and books that capture all financial transactions of a business, company, or individual, providing a basis for financial statements and audits.