What does Gotbucks Bank's 91-day gap positions reveal about the bank management's interest rate forecasts and the bank's interest rate risk exposure?
A)The bank is exposed to interest rate decreases and positioned to gain when interest rates decline.
B)The bank is exposed to interest rate increases and positioned to gain when interest rates decline.
C)The bank is exposed to interest rate increases and positioned to gain when interest rates increase.
D)The bank is exposed to interest rate decreases and positioned to gain when interest rates increase.

Question

Quizplus · Accepted Answer

A 91-day gap position indicates that the bank has more rate-sensitive liabilities than assets maturing in that period, exposing it to interest rate increases but benefiting if rates decline.

What Does Gotbucks Bank's 91-Day Gap Positions Reveal About the Bank