8-41 A positive gap implies that an increase in interest rates will cause _______ in net interest income.
A)no change
B)a decrease
C)an increase
D)an unpredictable change
E)Either A or B.

Question

Quizplus · Accepted Answer

A positive gap means that the bank's assets are more sensitive to interest rate changes than its liabilities. Therefore, an increase in interest rates will lead to an increase in net interest income.

8-41 a Positive Gap Implies That an Increase in Interest