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Question 20 (2.5 points) Listen What capital standard accords resulted from global bank competition? OA) BASEL B) STDEV O C) FDIC D) FED E) WOLVES Question 21 (2.5 points) Listen A bank could reduce asset sensitivity if gap is positive by: OA) decreasing its long-term securities as a percentage of total assets B) lengthening the average maturity of its loans OC) replacing fixed rate loans with variable rate loans OD) all of the above ) none of the above Question 22 (2.5 points) 1) Listen Problems with GAP include which of the following? O A Gap assumes that rates on individual assets will move in unison with market interest rates B) Gap does not consider embedded options c) Gap does not address the actual time within a time period when interest sensitive assets and liabilities will reprice OD) Gap assumes parallel shifts in the yield curve E) all of the above F) none of the above Question 23 (2.5 points) Listen Which of the following are sources of interest rate risk? O A) repricing risk B) beta risk C) standard deviation risk D) coefficient of variation risk E) all of the above F) none of the above Question 24 (2.5 points) Listen If a bank has a positive duration gap, the value of its equity is expected to: a A) decline if interest rates go up B) remain unchanged if interest rates go up C) increase if interest rates go up OD) duration gap has no relation to the change in a bank's equity position

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