The measure of interest rate risk that uses the difference between rate-sensitive assets and rate-sensitive liabilities is called the
A)gap.
B)duration measurement.
C)duration ratio.
D)gap ratio.

Question

Quizplus · Accepted Answer

The gap measurement is used to assess interest rate risk by calculating the difference between rate-sensitive assets and rate-sensitive liabilities. This method helps institutions understand their exposure to changes in interest rates.

The Measure of Interest Rate Risk That Uses the Difference