If an Organisation Has a Repricing Gap Equal to a Negative

question 44

Multiple Choice

If an organisation has a repricing gap equal to a negative $30 million,a 500 basis point increase in interest rates will cause profits to:

• A) rise by $15 million.
• B) rise by $1.5 million.
• C) fall by $15 million.
• D) fall by $1.5 million.

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Definitions:

Sum Certain

A specified, fixed amount of money that is agreed upon in a financial or legal document, leaving no ambiguity regarding the amount.

Requirements

Specific criteria or conditions that must be met in order to fulfill an agreement or complete a project.

Bearer Instrument

A bearer instrument is a type of document that allows the holder to claim the rights or assets it represents without endorsing or proving ownership.

Order Instrument

A financial document that is payable to a specified person or entity, such as a check, which requires endorsement for cashing or deposit.