Which of the Following Statements Is True

question 1

Multiple Choice

Which of the following statements is true?

• A)The major focus of the repricing gap is the capital loss effect.
• B)The major focus of the repricing gap is the capital gains effect.
• C)The repricing gap focuses on all three, the capital gains, the capital loss and the interest income effect.
• D)The major focus of the repricing gap is the interest income effect.

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Definitions:

Equilibrium

A state of balance in a market system where supply equals demand, and there is no tendency for change.

Economic Profits

The difference between total revenues and total costs, including both explicit and implicit costs, reflecting the excess return over the firm's opportunity costs.

Demand Curve

A graph showing how the quantity demanded of a good or service varies with its price.

Elastic

A characteristic of a good or service where its demand or supply changes significantly when its price changes.