The Repricing Model Ignores Information Regarding the Distribution of Assets

question 121

Multiple Choice

The repricing model ignores information regarding the distribution of assets and liabilities within maturity buckets.This limitation of the model refers to

• A)market value effect.
• B)overaggregation.
• C)runoffs and pre-payments.
• D)OBS activities.
• E)the spread effect.

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the percentage of tax applied to your income for each tax bracket in which you qualify.

Average Tax Rate

The portion of an individual's or entity's taxable income that is paid in taxes, calculated by dividing the total tax amount by the taxable income.

Payroll Tax

A tax imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff.

Marginal Tax

The additional tax paid on an additional dollar of income, used in progressive tax systems to tax higher incomes at higher rates.