A bank is asset-sensitive if:

1. Interest sensitive ratio is less than 1.0
2. It experiences fall in net interest income when interest rates fall
3. Relative interest sensitive gap is negative
4. Both (a) and (b)

Banks are exposed to interest rates:

a. Whether Interest rates are declining or rising

b.When interest rates are steady

c.When interest rates are rising

d.When interest rates are declining

A bank that is liability-sensitive will have:

1. A positive impact on net interest income if interest rates fall
2. A negative impact on net interest income if interest rates rise
3. A positive impact on net interest income if interest rates rise
4. Both (a) and (b)