One Problem with Basic Gap Analysis Is That It

question 60

Multiple Choice

One problem with basic gap analysis is that it

• A) is calculated assuming interest rates on all maturities are equal.
• B) is calculated assuming interest rates on all maturities change by equal amounts.
• C) measures the sensitivity of net worth to interest rate changes.
• D) does not measure the sensitivity of income to interest rate changes.
• E) applies only to financial institutions.

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Definitions:

Random Number Intervals

The ranges between which randomly generated numbers fall, used in simulations and probabilistic analyses.

EOQ Methodology

The Economic Order Quantity method calculates the optimal order size to minimize the costs of holding inventory and stock ordering, balancing demand with inventory costs.

Variable Demand

Fluctuations in customer demand for products or services over time, which can significantly impact supply chain, inventory management, and planning processes.