8-17 The gap ratio is useful because it indicates the scale of the interest rate exposure by dividing the gap by the asset size of the institution.

Question

Quizplus · Accepted Answer

The statement is true. The gap ratio is calculated by dividing the gap (difference between rate-sensitive assets and liabilities) by the asset size of the institution. This ratio helps to indicate the scale of an institution's interest rate exposure.

8-17 the Gap Ratio Is Useful Because It Indicates the Scale