How Do You Interpret the Position of an FI with a Positive

question 35

Multiple Choice

How do you interpret the position of an FI with a positive on-balance-sheet gap and a negative off-balance sheet gap?

• A)The FI uses its on-balance-sheet activities to hedge its off-balance-sheet activities.
• B)The FI uses its off-balance-sheet activities to hedge its on-balance-sheet activities.
• C)The FI believes that interest rates will increase and made a mistake in setting its gap for off-balance-sheet activities.
• D)The FI believes that interest rates will increase and made a mistake in setting its gap for on-balance-sheet activities.

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Definitions:

Forms

In Platonic philosophy, refers to the abstract, perfect, non-physical essences of things or concepts that represent their most accurate reality.

Will to Live

A fundamental drive or motivation inherent in humans and animals aimed at survival and continuation.

Schopenhauer's Metaphysics

The philosophical inquiry concerning the nature of reality and the fundamental structure of the world as outlined by Arthur Schopenhauer, emphasizing the will as the underlying essence of all things.

Optimistic

Having a hopeful or positive outlook on the future, believing that the best possible outcome will occur.