What Are the Weaknesses of Using Static GAP Analysis Versus

question 6

Multiple Choice

What are the weaknesses of using static GAP analysis versus duration gap analysis?

• A)Static GAP ignores the time value of money.
• B)Static GAP ignores the cumulative impact of interest rate changes on a bank's risk profile.
• C)Static GAP does not proscribe the treatment of demand deposits.
• D)All of the above are weaknesses of using static GAP analysis versus duration gap analysis.
• E)a.and b.

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Definitions:

Habituation

The process by which an individual becomes accustomed to a stimulus, leading to a decrease in response over time.

Visual-recognition Memory

The ability to remember and recognize previously encountered objects or individuals by sight.

Cross-modal Transference

The ability to transfer information acquired through one sensory modality to another.

Habituation Time

The duration it takes for an individual to become accustomed or less responsive to a repetitive stimulus.