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. Discretionary financing needs will be higher if ________. Assume "all else equal."

A. the firm's net profit margin increases

B. sales decline

C. the dividend payout ratio is raised

D. excess capacity exists for fixed assets.