22-19 an FI with a Positive Duration Gap Is Exposed

question 7

True/False

22-19 An FI with a positive duration gap is exposed to interest rate declines and could hedge its interest rate risk by buying forward contracts.

---

Definitions:

Financial Theorists

Scholars and experts who study and develop theories concerning how money is managed, including investments, capital markets, and financial institutions.

Opportunity Costs

The denial of gaining from various other opportunities when a single choice is made.

Economists

Professionals who study the production, distribution, and consumption of goods and services.

Unrealistic Assumptions

Hypothetical conditions in models or theories that do not necessarily reflect real-life complexities, used to simplify analysis.