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What Type of GAP Analysis Directly Measures a Bank's Net

question 25

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What type of GAP analysis directly measures a bank's net interest sensitivity through the last day of the analysis period?


Definitions:

Real Interest Rate

The interest rate that has been modified to account for inflation, showing the real cost of borrowing or the genuine investment return.

Fisher Effect

an economic theory proposing that the real interest rate is independent of monetary measures, especially the nominal interest rate and inflation rate.

Nominal Interest Rate

The rate of interest before adjustment for inflation; the stated or advertised interest rate on a loan or investment.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing and the true yield on lending.

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