A Bank Has a Negative Repricing Gap

question 12

Multiple Choice

A bank has a negative repricing gap. This implies that

• A)some RSAs are financed by fixed-rate liabilities.
• B)some RSLs are financing fixed-rate assets.
• C)some RSAs are financing equity.
• D)the bank has no fixed-rate assets.

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Definitions:

Air Masses

Large volumes of air defined by their temperature and humidity characteristics, originating over specific regions.

Cold Front

A leading edge of cooler air that displaces warmer air, often causing temperature drops and possibly precipitation as it moves.

Large-Scale Circulation

Large-scale circulation refers to the extensive, wide-ranging movement of the atmosphere or ocean, influencing climate patterns and weather systems globally.

High Precipitation

An atmospheric condition where a significantly above-average amount of precipitation (rain, snow, hail, etc.) occurs.