Measuring the Sensitivity of Bank Profits to Changes in Interest

question 81

Multiple Choice

Measuring the sensitivity of bank profits to changes in interest rates by multiplying the gap times the change in the interest rate is called

• A)basic duration analysis.
• B)basic gap analysis.
• C)interest-exposure analysis.
• D)gap-exposure analysis.

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Definitions:

Calls in Advance

Money received by a company from shareholders before their shares have been issued to them, often applied towards future calls on shares.

Share Issuance Costs

Expenses associated with the issuance of new shares, such as underwriting, legal, and registration fees.

Financial Statements

Formal records of financial activities and position of a business, person, or other entity, presenting the financial results over a specific period.

Forfeited Shares

Shares that are surrendered or taken back by a company from an investor because of the non-fulfillment of purchase conditions or agreements.