Question 1

A(n)__________________________ means that the bank has more interest-sensitive liabilities than interest-sensitive assets.

Accepted Answer

negative interest-sensitive gap (liability sensitive

Question 2

A(n)__________________________ gap means that for a parallel increase in all interest rates,the market value of net worth will tend to increase.

Accepted Answer

negative-duration

Question 3

__________________________ is the coordinated management of both the bank's assets and its liabilities.

Accepted Answer

Funds management

Question 4

Recent decades have ushered in dramatic changes in banking.The goal of __________________ was simply to gain control of the bank's sources of funds.

Accepted Answer

The answer of Recent decades have ushered in dramatic changes...

Question 5

The __________________ premium on a bond reflects the differences in the ease and ability to sell the bond in the secondary market at a favorable price.

Accepted Answer

The answer of The __________________ premium on a bond reflects...

Question 6

The bank's __________________________ takes into account the idea that the speed (sensitivity)of interest rate changes will differ for different types of assets and liabilities.

Accepted Answer

The answer of The bank's __________________________ takes into account the...

Question 7

The __________________ shows the relationship between the time to maturity and the yield to maturity of bonds.

Accepted Answer

The answer of The __________________ shows the relationship between the...

Question 8

The ___________________ view of assets and liabilities held that the amount and types of deposits was primarily determined by customers and hence the key decision a bank needed to make was with the assets.

Accepted Answer

The answer of The ___________________ view of assets and liabilities...

Question 9

__________________________ are those assets which mature or must be repriced within the planning period.

Accepted Answer

The answer of __________________________ are those assets which mature or...

Question 10

The __________________________ is the rate of return on a financial instrument using a 360-day year relative to the instrument's face value.

Accepted Answer

The answer of The __________________________ is the rate of return...

Question 11

__________________________ is the difference between the dollar-weighted duration of the asset portfolio and the dollar-weighted duration of the liability portfolio.

Accepted Answer

The answer of __________________________ is the difference between the dollar-weighted...

Question 12

__________________________ is the risk due to changes in market interest rates which can adversely affect the bank's net interest margin,assets,liabilities,and equity.

Accepted Answer

The answer of __________________________ is the risk due to changes...

Question 13

The __________________________ component of interest rates is the risk premium due to the probability that the borrower will miss some payments or will not repay the loan.

Accepted Answer

The answer of The __________________________ component of interest rates is...

Question 14

The __________________ premium on a bond allows the investor to be compensated for their projected loss in purchasing power from the increase in the prices of goods and services in the future.

Accepted Answer

The answer of The __________________ premium on a bond allows...

Question 15

A(n)__________________________ gap means that for a parallel increase in all interest rates,the market value of net worth will tend to decline.

Accepted Answer

The answer of A(n)__________________________ gap means that for a parallel...

Question 16

The __________________________ is the interest rate that equalizes the current market price of a bond with the present value of the future cash flows.

Accepted Answer

The answer of The __________________________ is the interest rate that...

Question 17

The __________________________ is equal to the duration of each individual type of asset weighted by the market value of each type of asset out of the total market value of all assets.

Accepted Answer

The answer of The __________________________ is equal to the duration...

Question 18

__________________________ is the difference between interest-sensitive assets and interest-sensitive liabilities.

Accepted Answer

The answer of __________________________ is the difference between interest-sensitive assets...

Question 19

The __________________________ is equal to the duration of each individual type of liability in the portfolio weighted by the market value of each type of liability in the portfolio out of the total market value of all liabilities.

Accepted Answer