Consider a bank with a positive gap, where the average maturity of its assets is longer than the average maturity of its liabilities. If interest rates decrease, how will this likely impact the bank's Net Interest Income $($NII$)?$

Question $7$

a$.$NII will likely decrease because the decrease in interest income on assets will be greater than the decrease in interest expense on liabilities.

b$.$NII will not be affected by changes in interest rates as long as the bank maintains a positive gap.

c$.$NII will likely increase because the decrease in interest expense on liabilities will be greater than the decrease in interest income on assets.

d$.$A positive gap protects the bank from all interest rate risk.

e$.$The impact on NII is uncertain and depends on the specific size of the interest rate decrease.