When repricing all interest-sensitive assets and all interest-sensitive liabilities in a balance sheet,the cumulative gap will be
A)zero.
B)one.
C)greater than one.
D)a negative value.

Question

Quizplus · Accepted Answer

When repricing all interest-sensitive assets and all interest-sensitive liabilities in a balance sheet, the cumulative gap is calculated as the difference between the rate-sensitive assets and rate-sensitive liabilities. If the total rate-sensitive assets and rate-sensitive liabilities are equal to each other, then the cumulative gap will be zero. Therefore, option A) is the correct answer.

When Repricing All Interest-Sensitive Assets and All Interest-Sensitive Liabilities in a Balance