9-119 What Is This Bank's Interest Rate Risk Exposure,if Any

question 88

Essay

9-119 What is this bank's interest rate risk exposure,if any?
a.The bank is exposed to decreasing interest rates because it has a negative duration gap of ?0.21 years.
b.The bank is exposed to increasing interest rates because it has a negative duration gap of ?0.21 years.
c.The bank is exposed to increasing interest rates because it has a positive duration gap of +0.21 years.
d.The bank is exposed to decreasing interest rates because it has a positive duration gap of +0.21 years.
e.The bank is not exposed to interest rate changes since it is running a matched book.

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Workers

Individuals engaged in any form of employment, providing labor to produce goods or deliver services in exchange for wages, salaries, or other forms of compensation.

Profits

The financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes involved in sustaining those activities.

Labor Union

Worker organization that seeks to secure economic benefits for its members.

Collective Bargaining

Negotiations between union and management to obtain agreements on wages, working conditions, and other issues.