Which of the Following Statements Is True

question 76

Multiple Choice

Which of the following statements is true?

• A)The size of the range over which bucket gaps are calculated does not matter as the repricing gap will always lead to exact results.
• B)The shorter the range over which bucket gaps are calculated, the greater the potential error.
• C)The shorter the range over which bucket gaps are calculated, the smaller the potential error.
• D)None of the listed options are correct.

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Definitions:

Contract Curve

In microeconomics, it represents the set of optimal allocations of resources between two or more parties from an initial situation.

Pareto Optimal

A condition where resources are distributed in such a way that improving the situation of one person necessitates worsening the situation of another person.

Utility Function

Represents the relationship between the quantities of goods consumed and the level of happiness or utility derived from them.

Initial Endowment

The initial allocation of resources or goods that an individual or firm has before any trade takes place in an economic model.