comercial bank management

1. Formula for the interest rate sensitivity gap

• RSL - RSA

• RSA + RSL

• RSA - RSL

1.  If GAP is in a state > 0, then Interest Rate ….., NIM …..

•  Increase - Increase

• Increase - Decrease

• Decrease - Decrease

The objective of interest rate risk management

• Minimizing losses for the bank

  
  

• Decreasing profitability for the bank

  
  

• Maximize losses for banks

  
  

The objective of ALM:

•  Increases money sources for banks

• Establishing and maintaining a stable source of funding, ensuring an adequate capital base for monetary business operations.

  
  

• Reduces funding sources and ensures sufficient capital for currency trading activities

  
  

Commerce National Bank reports interest-sensitive assets of $870 million and Interest-sensitive liabilities of $625 million during the coming month. Is the bank asset sensitive or liability sensitive? 

• 1. asset sensitive

• 1.  liability sensitive

• 1. Both are wrong

If interest rates are predicted to increase, the bank will

• keep the state DA > DL

• 1. keep the state DA < DL

• 1. keep the state DA = 2DL

 Which formula is incorrect when determining duration deviation?

• D-GAP = DA –DL* L/A

  
  

• D-GAP = DA ×A - DL×L

  
  

• D-GAP = A - L

  
  

Interest rate risk management is not a content of Asset-Liability management. In your opinion, is this statement true or false?

•  True

  
  

• False

  
  

ALM strategies:

•  Asset Management Strategy

  
  

•  Debt Management Strategy

  
  

• Fund management strategy

  
  

• All the answers above

  
  

Which of the following solutions can improve the efficiency of Asset-Liability-Asset management?

• Complete mechanisms and policies for Asset-Liability-Credit management

•  Build a strong enough information technology system

• Training and improving the awareness level of bank staff

• All of the above answers