A bank's cumulative GAP:
A) is defined as the dollar amount of rate-sensitive assets divided by the dollar amount of rate-sensitive liabilities.
B) is defined as the dollar amount of earning assets divided by the dollar amount of total liabilities.
C) compares rate-sensitive assets with rate-sensitive liabilities across all time buckets.
D) compares rate-sensitive assets with rate-sensitive liabilities across a single time bucket.
E) compares the dollar amount of earning assets times the average liability interest rate.

Question

Quizplus · Accepted Answer

Cumulative GAP is a measure that compares rate-sensitive assets with rate-sensitive liabilities across all time buckets, allowing banks to assess their interest rate risk over different time periods.

A Bank's Cumulative GAP