One method of dealing with the problem of imperfect correlation of market interest rates with portfolio interest rates is the use of the standardized gap.

Name: One method of dealing with the problem of imperfect correlation of market interest rates with portfolio interest rates is the use of the standardized gap.
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Quizplus · Accepted Answer

The standardized gap is a risk management tool used to measure the sensitivity of a portfolio's interest income to changes in market interest rates, helping to address imperfect correlation.

One Method of Dealing with the Problem of Imperfect Correlation