If a Bank Has a Negative Gap,then a Decrease in Interest

question 65

True/False

If a bank has a negative gap,then a decrease in interest rates will increase income.

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Definitions:

Net Present Value

A financial metric that calculates the value today of future cash flows, discounted at a particular rate.

Monthly Interest Rate

The interest rate charged on a loan or realized on an investment over a month's time period.

Credit Policy

A set of guidelines that a company follows to determine credit terms for customers, which can impact cash flow and sales.

Monthly Interest Rate

The interest rate charged or paid on a loan or savings account calculated on a monthly basis.