The Gap Ratio Is Useful Because It Indicates the Scale

question 59

True/False

The gap ratio is useful because it indicates the scale of the interest rate exposure by dividing the gap by the asset size of the institution.

---

Definitions:

Federal Disaster

An event causing severe damage or distress, officially declared a disaster by the federal government to make federal assistance available.

Tax Return

A document filed with state or federal authorities that reports income, expenses, and other pertinent tax information.

Wild Fires

Uncontrolled fires in wildland areas, often exacerbated by drought, wind, and heat, causing extensive damage to ecosystems and property.

Deductible

A cost that may be deducted from total income to decrease taxable income, resulting in a reduction of the tax owed.