A Bank Manager Would Want to Set the Duration Gap

question 56

True/False

A bank manager would want to set the duration gap greater than zero when interest rates are expected to rise.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or services, calculated in advance based on estimated overhead costs and an allocation base.

Machine-Hours

Machine-hours are a measure of the amount of time a machine is operated, used in allocating manufacturing overhead based on usage.

Direct Labor-Hours

The number of labor hours spent by employees directly working on the production of goods or services.

Casting

A manufacturing process where a liquid material is poured into a mold, which contains a hollow cavity of the desired shape, and then allowed to solidify.