What Does a Bank's Duration Gap Measure

question 6

Multiple Choice

What does a bank's duration gap measure?

• A) The duration of short-term buckets minus the duration of long-term buckets.
• B) The duration of the bank's assets minus the duration of its liabilities.
• C) The duration of all rate-sensitive assets minus the duration of rate-sensitive liabilities.
• D) The duration of the bank's liabilities minus the duration of its assets.
• E) The duration of all rate-sensitive liabilities minus the duration of rate-sensitive assets.

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Definitions:

Positive Benefits

Advantageous or favorable outcomes that arise from a particular action or set of conditions, contributing to well-being or success.

Attitude Toward Time

An individual or cultural perception of time, emphasizing its value and importance, which impacts behavior and prioritization.

Cultural Difference

Variations in beliefs, behaviors, practices, and values among people from different societies or backgrounds.

Functional Conflict

Results in positive benefits to the group.