Which of the Following Is a Weakness of the Repricing

question 37

Multiple Choice

Which of the following is a weakness of the repricing model to measure interest rate risk?

• A)Potential for overaggregation of assets and liabilities within each maturity bucket.
• B)It ignores how changes in interest rates affect the market value of assets and liabilities.
• C)It ignores the reinvestment of loan interest and principal payments that are reinvested at current market rates.
• D)It fails to recognize off-balance-sheet activities that may be rate sensitive.
• E)All of these.

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Definitions:

Chemical Hazard Control

The methods and practices involved in reducing or eliminating exposure to harmful chemical substances in the environment or workplaces.

Government Intervention

The involvement by the government in the economy, with actions that can include regulations, subsidies, tariffs, and direct provision of goods and services.

Externalities

Costs or benefits arising from an economic activity that affect other parties who did not choose to incur that cost or benefit.

Prices

The amount of money required to purchase goods or services, serving as the consideration for the value of the goods or services being exchanged.