When Repricing All Interest-Sensitive Assets and All Interest-Sensitive Liabilities in a Balance

question 103

Multiple Choice

When repricing all interest-sensitive assets and all interest-sensitive liabilities in a balance sheet,the cumulative gap will be

• A)zero.
• B)one.
• C)greater than one.
• D)a negative value.

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Definitions:

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded; also known as market-clearing price.

Equilibrium Quantity

At the market equilibrium price, the amount of goods or services available matches the amount that is demanded.