Put the following steps for conducting a Static GAP analysis in the proper chronological order.
I. Forecast changes in net interest income for a variety of interest rate scenarios.
II. Select the sequential time intervals for determining when assets and liabilities are rate-sensitive.
III. Group assets and liabilities into time “buckets.”
IV. Develop interest rate forecasts.

A) I, II, III, IV
B) IV, I, III, II
C) IV, I, II, III
D) II, III, IV, I
E) IV, II, III, I

Question

Put the following steps for conducting a Static GAP analysis in the proper chronological order.
I.	Forecast changes in net interest income for a variety of interest rate scenarios.
II.	Select the sequential time intervals for determining when assets and liabilities are rate-sensitive.
III.	Group assets and liabilities into time “buckets.”
IV.	Develop interest rate forecasts.

A) I, II, III, IV
B) IV, I, III, II
C) IV, I, II, III
D) II, III, IV, I
E) IV, II, III, I

Quizplus · Accepted Answer

The correct sequence for conducting a Static GAP analysis starts with developing interest rate forecasts (IV), followed by selecting the sequential time intervals for determining when assets and liabilities are rate-sensitive (II). Next, assets and liabilities are grouped into time “buckets” (III), and finally, changes in net interest income are forecasted for a variety of interest rate scenarios (I).

Put the Following Steps for Conducting a Static GAP Analysis