In terms of liquidity risk measurement, the financing gap is defined as rate sensitive assets minus rate sensitive liabilities.

Question

Quizplus · Accepted Answer

The financing gap focuses on the difference between expected cash inflows and outflows over a certain period, not specifically on rate sensitive assets minus rate sensitive liabilities. Rate sensitive assets and liabilities are more directly related to interest rate risk measurement.

In Terms of Liquidity Risk Measurement, the Financing Gap Is