Which of the following indicates a positive gap according to the repricing model?
A)the book value of rate-sensitive liabilities is less than the book value of rate-sensitive assets.
B)the book value of rate-sensitive assets is less than the book value of rate-sensitive liabilities.
C)the market value of rate-sensitive assets is less than the market value of rate-sensitive liabilities.
D)the book value of rate-sensitive liabilities is greater than the book value of rate-sensitive assets.

Question

Quizplus · Accepted Answer

A positive gap occurs when the book value of rate-sensitive assets exceeds the book value of rate-sensitive liabilities, indicating that an increase in interest rates would likely increase net interest income.

Which of the Following Indicates a Positive Gap According to the Repricing