One Reason to Exclude NOW Accounts When Estimating a Bank's

question 12

True/False

One reason to exclude NOW accounts when estimating a bank's repricing gap is because the interest rates paid on these accounts typically do not change with the level of market rates.

---

Definitions:

Long-term Investments

Assets that a company intends to hold for more than one year, typically including stocks, bonds, or real estate, aimed at generating long-term income or appreciation.

Intangible Assets

Non-physical assets of value to a company, such as patents, trademarks, goodwill, and copyrights.

Normal Account Balance

The typical or expected balance of an account, where asset and expense accounts are usually debit balances and liability, equity, and revenue accounts are credit balances.

Revenue Account

An account that tracks the income a company generates from its business activities.