The gap is the difference between interest-rate-sensitive liabilities and interest-rate-sensitive assets.

Question

Quizplus · Accepted Answer

The gap is the difference between the amounts of assets and liabilities that reprice or mature within a certain time period, not just the difference between interest-rate-sensitive liabilities and assets. It's a measure used in interest rate risk management to assess how changes in interest rates could affect a financial institution's net interest income.

The Gap Is the Difference Between Interest-Rate-Sensitive Liabilities and Interest-Rate-Sensitive