The gap ratio expresses the reprice gap for a given time period as a percentage of
A)equity.
B)total liabilities.
C)current liabilities.
D)total assets.

Question

Quizplus · Accepted Answer

The gap ratio is commonly used in asset-liability management, specifically to measure the sensitivity of a bank's net interest income (NII) to changes in interest rates. The gap ratio expresses the reprice gap (difference between interest rate-sensitive assets and liabilities) for a given time period as a percentage of total assets. Therefore, option D - total assets - is the best choice.

The Gap Ratio Expresses the Reprice Gap for a Given