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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