GAP analysis indicates that a bank with a positive GAP position will: A) have an increase in net interest income when rates rise B) have a decrease in net interest income when rates rise C) have an increase in net interest income when rates fall D) have a decrease in net interest income when rates fall E) a and d F) b and c none of the above Bank Some Risk has a negative GAP in the 3-month time bucket. Which of the following measures would help reduce the bank's exposure to interest rate risk during this period? A) Buy 5-year maturity securities and finance them with 3-month CDs B) Pay premium rates to attract short-term deposits and use the money to fund fixed rate mortgages C) Pay premium rates to attract 3-year certificates of deposit and invest the funds in 3 month Treasury bills D) All of the above E Only a and be Earnings sensitivity analysis involves: A) determining base interest rate case and then varying rates above and below the base case B) always using parallel yield curve movements C) ignoring the impact of embedded options to make the analysis more clear D) requiring that rates on assets and liabilities move by the same amounts E) all of the above F) none of the above GAP analysis indicates that a bank with a negative GAP position will: A) have an increase in net interest income when rates rise B) have a decrease in net interest income when rates rise C) have an increase in net interest income when rates fall D) have a decrease in net interest income when rates fall E) a and d F) band G) none of the above Risk Bank has a positive GAP position. If a parallel shift downward in interest rates occurs, the bank's net interest income would be expected to: A Decrease by an amount equal to GAP B) Decrease by an amount equal to GAP times the change in rates Increase by an amount equal to GAP D) Increase by an amount equal to GAP times the change in rates