If a Bank Has a Gap of -$10 Million,it Can

question 110

Multiple Choice

If a bank has a gap of -$10 million,it can reduce its interest-rate risk by

• A) paying a fixed rate on $10 million and receiving a floating rate on $10 million.
• B) paying a floating rate on $10 million and receiving a fixed rate on $10 million.
• C) selling $20 million fixed-rate assets.
• D) buying $20 million fixed-rate assets.

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Definitions:

Group Norms

Informal guidelines and shared expectations that regulate the behavior of group members.

Behaviourist Theories

Psychological concepts focusing on observable behaviors, emphasizing the role of external stimuli in shaping behavior.

Positivist

An individual who adheres to positivism, a philosophical system that recognizes only that which can be scientifically verified or which is capable of logical or mathematical proof.

Scientific Method

A systematic approach to research involving the collection of data, formulation of a hypothesis, experimentation, and validation or refutation of the hypothesis.