An FI with a Negative Duration Gap Is Exposed to Interest

question 118

True/False

An FI with a negative duration gap is exposed to interest rate declines and could hedge its interest rate risk by buying forward contracts.

---

Definitions:

Beautiful Is Good

A social psychological phenomenon where physical attractiveness leads people to attribute other positive traits such as intelligence and kindness to the person.

Stereotype

A fixed, overgeneralized belief about a particular group or class of people.

Attribution Theory

A psychological theory that explains how individuals infer the causes of their own and others' behaviors.

Bystander Effect

The social psychological phenomenon where individuals are less likely to offer help to a victim when other people are present, due to a diffusion of responsibility.