An FI with a Negative Gap of $20 Million Suffers

question 40

True/False

An FI with a negative gap of $20 million suffers a $0.2 million decrease in its net interest income if interest rates decrease by 1 per cent.

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Definitions:

Net Income

The amount of money a company earns after all expenses and taxes have been subtracted from its total revenue.

Inventory Cost

The total cost incurred to procure, produce, and store inventory, including purchase price, production, and handling costs.

Gross Profit

the difference between revenue and the cost of goods sold before deducting overhead, payroll, taxation, and interest payments.

Cost Of Goods Sold

The immediate expenses directly related to creating a company's sold products, covering both labor and materials costs.