If a Bank Has a Gap of -$10 Million,it Can

question 110

Multiple Choice

If a bank has a gap of -$10 million,it can reduce its interest-rate risk by

• A) paying a fixed rate on $10 million and receiving a floating rate on $10 million.
• B) paying a floating rate on $10 million and receiving a fixed rate on $10 million.
• C) selling $20 million fixed-rate assets.
• D) buying $20 million fixed-rate assets.

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Definitions:

Business Interests

Financial stakes or investments in commercial enterprises, reflecting the concerns or involvements a person or company has in the business sector.

Tort

A civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act.

Crime

An act or omission that is prohibited by law and can result in punishment upon conviction.

False Imprisonment

Refers to the unlawful restraint of a person against their will by someone without legal authority or justification.