Which of the Following Is a Weakness of the Repricing

question 56

Multiple Choice

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

• A)Potential for over-aggregation 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 and it fails to recognise off-balance-sheet activities that may be rate sensitive.
• D)All of the listed options are correct.

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Definitions:

Self-Reported Mood

A method of assessment where individuals describe their current mood state or feelings typically through questionnaires or interviews.

Independent Variable

The variable in an experiment that is manipulated or changed to observe its effect on the dependent variable.

Dependent Variable

In an experiment, it is the variable that is tested and measured, potentially being affected by the manipulation of the independent variable.

Positive Correlation Condition

A condition where two variables increase or decrease in parallel, indicating a direct relationship between them.