The Duration Gap Can Be Used to Measure How Changes

question 62

Multiple Choice

The duration gap can be used to measure how changes in the interest rate affect an FI's:

• A)net worth
• B)maturity gap strategy
• C)liquidity strategy
• D)All of the listed options are correct.

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Definitions:

Returns To Scale

The rate at which production output increases as a result of a proportional increase in all inputs or resources.

Marginal Product

The increase in output resulting from a one-unit increase in the input, keeping all other inputs constant.

Factor X

A placeholder term for an unspecified or unknown factor that can influence outcomes in a given situation or calculation.

Production Function

A production function is an equation that relates the quantity of output produced to the quantities of inputs used in production.