1. If an FI's repricing gap is less than zero, then
it is deficient in its required reserves.
it is deficient in its capital ratio requirement.
its liability costs are more sensitive to changing market interest rates than are its asset yields.
its liability costs are less sensitive to changing market interest rates than are its asset yields.
the duration of the FI's liabilities exceeds the duration of FI's assets.
2. Which of the following statements best describe a derivative contract?
Contractual commitments to make a loan up to a stated amount at a given interest rate in the future.
Contingent guarantees sold by an FI to underwrite the performance of the buyer of the guaranty.
Agreement between two parties to exchange a standard quantity of an asset at a predetermined price at a specified date in the future.
Trading in securities prior to their actual issue.
Loans originated by an FI and then sold to other investors with recourse.