GAP ANALYSIS

  1. Process in which a firm compares its actual performance to its projected performance to assess if they have met these expectations and used their resources efficiently. It answers two points: current state and target state.
  2. Asset-liability management technique which can be used to determine interest rate risk or liquidity risk, except credit risk. It is a simple IRR measurement method getting the difference between rate sensitive assets and rate sensitive liabilities over a specific time period. This analysis works best if assets and liabilities are comprised of fixed cash flows. Hence, a substantial shortcoming of gap analysis cannot handle options since options have unknown cash flows.

Back
GAP AMOUNT
ACTIVE PARTNER
InstaForex
© 2025, ForexPedia, Dictionary of Forex All Right Reserved | Contact Us | Term of Use |
UP
UP