A Financial Institution with a Negative Gap Would Like to Receive

question 24

True/False

A financial institution with a negative gap would like to receive the floating rate in an interest-rate swap.

---

Definitions:

Marginal Resource Cost

The change in total cost that comes from producing one additional unit of a good or service.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production.

Marginal Revenue Product

The additional revenue a firm generates by employing one more unit of input, such as labor or capital.

Perfectly Competitive Market

A market characterized by a high level of competition, where no single buyer or seller can influence prices and products are homogeneous.