The Difference Between Interest-Sensitive Assets and Interest-Sensitive Liabilities Is Termed

question 29

Multiple Choice

The difference between interest-sensitive assets and interest-sensitive liabilities is termed the:

• A) interest-sensitivity index.
• B) rate-risk index.
• C) gap.
• D) duration.

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Definitions:

Producer Net Gains

The total benefits or earnings that producers receive from selling goods or services, over and above their costs of production.

Marginal Revenue

The additional income derived from selling one more unit of a good or service.

Lerner Index

A measure of a firm's market power, calculated as the difference between price and marginal cost divided by price.

Elastic

Describes demand that is highly sensitive to changes in price, meaning that quantity demanded can significantly increase or decrease as prices change.