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The correct answer is that a bank's cumulative GAP will always be the sum of the interim periodic GAPs. Cumulative GAP measures the overall liquidity position of a bank by aggregating the differences between its rate-sensitive assets and rate-sensitive liabilities over various time periods.

Each interim periodic GAP represents the net position for a specific time frame, and when you sum these interim gaps, you arrive at the cumulative GAP for the entire time horizon. This approach provides a comprehensive view of how the bank's exposure to interest rate risk evolves as time progresses and can be essential for assessing the bank's stability and strategy in response to changes in interest rates.

Understanding GAP analysis is crucial in banking, as it informs management about potential vulnerabilities in earning and funding based on interest rate movements. Therefore, recognizing that cumulative GAP reflects the total effect of rate sensitivity over multiple periods reinforces the importance of effective interest rate risk management practices.