If the Chosen Maturity Buckets Have a Time Period That

question 30

Multiple Choice

If the chosen maturity buckets have a time period that is too long, the repricing model may produce inaccurate results because

• A)as the time to maturity increases, the price volatility increases.
• B)price changes will be overestimated.
• C)there may be large differentials in the time to repricing for different securities within each maturity bucket.
• D)the FI will be unable to accurately measure the quantity of rate-sensitive assets.
• E)the FI will be unable to accurately measure the quantity of rate-sensitive liabilities.

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Definitions:

Employees

Individuals who are hired by a company to perform specific duties and tasks in exchange for compensation, contributing to the company's operations and goals.

Common Stockholders

Individuals or entities that own shares in a company's common stock, granting them voting rights and a share in the company's profits through dividends.

Minimum Amount

The smallest quantity or value permitted or possible in a given set of circumstances.

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company’s earnings.