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:

Net Operating Income

Earnings from a company's regular activities before taxes and interest, used to gauge the company's operational efficiency.

Absorption Costing

Absorption costing is an accounting method that includes both variable and fixed manufacturing costs in the cost of a product.

Net Operating Income

A financial metric that calculates the profit generated from a company's operations, excluding taxes and interest.

Net Operating Income

The profit generated from a company's everyday business operations, excluding expenses from interest and taxes.