8. If a bank has a negative GAP, a decrease in interest rates will cause interest income to __________, interest expense to__________, and net interest income to __________.

Increase, increase, increase

Increase, decrease, increase

Increase, increase, decrease

Decrease, decrease, decrease

Decrease, decrease, increase

unanswered

9. Which of the following is part of funds management?

The goal of funds management is simply to gain control over the bank's funds sources.

Since the number of deposits a bank holds is determined largely by its customers, the focus of the bank should be on managing the assets of the bank.

Management of the bank's assets must be coordinated with management of the bank's liabilities.

The spread between interest revenues and interest expenses is unimportant.

None of the above

unanswered

10. Banks with a positive cumulative interest-sensitive gap will benefit if interest rates rise, but lose income if interest rates decline.

True

False

unanswered

11. Short-term interest rates tend to rise more slowly than long-term interest rates and to fall more slowly when all interest rates in the market are headed down.

True

False