Interest Rate Risk

question 16

Multiple Choice

Interest rate risk:

• A) varies inversely with a bank's GAP.
• B) can be measured by the volatility of a bank's net interest income given changes in the level of interest rates.
• C) can be eliminated by matching fixed rate assets with variable rate liabilities.
• D) rarely has an impact on bank earnings.
• E) All of the above

---

Definitions:

Low-Cost Provider Strategy

A commercial approach focusing on maintaining operational efficiency to offer products or services at the lowest price possible without sacrificing quality.

Competitive Position

The standing or ranking of an organization in relation to its competitors, based on factors like market share, strength, product quality, or brand reputation.

Competitive Scope

Competitive scope involves the breadth, domain, or range of arenas in which a company chooses to compete, determining its market reach and focus.

Divestiture Strategy

A business strategy involving the sale, closure, or spinoff of a company division or segment to refine its core operations or generate capital.