A Bank with a Negative Interest-Sensitive GAP

question 52

Multiple Choice

A bank with a negative interest-sensitive GAP:

• A)has a greater dollar volume of interest-sensitive liabilities than interest-sensitive assets.
• B)will generate a higher interest margin if interest rates rise.
• C)will generate a lower interest margin if interest rates fall.
• D)has assets and liabilities with the same duration.
• E)has liabilities with a greater duration than its assets.

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Definitions:

OD Efforts

Initiatives undertaken to improve an organization's effectiveness, health, and capacity through planned change in processes and structures.

Physical Setting

The environmental conditions and physical space in which an individual lives or operates.

Organizing Arrangements

A term referring to the methods and structures used to arrange, coordinate, and manage activities and tasks within an organization.

Processes

A series of actions, changes, or functions that bring about a result or are involved in the way something operates or works.