Using the Duration Gap to Measure the Change in an FI's

question 57

Multiple Choice

Using the duration gap to measure the change in an FI's net worth in case of large interest rate shocks:

• A)produces exact results
• B)only produces exact results if interest rates change instantaneously
• C)produces approximate results only due to concavity
• D)produces approximate results only due to convexity

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Definitions:

Aggregate Planning

The process of developing, analyzing, and maintaining a preliminary approximate schedule of the overall operations of an organization.

Consumer Demand

The desire and ability of consumers to purchase goods and services at certain prices over a specific period of time.

Quick Response

A strategy aimed at reducing lead times across the supply chain to meet customer demand more efficiently.

On-Call Labour

A workforce management strategy where employees are called to work as needed, rather than having a fixed schedule.