The Repricing Gap Does Not Accurately Measure FI Interest Rate

question 32

Multiple Choice

The repricing gap does not accurately measure FI interest rate risk exposure because

• A)FIs cannot accurately predict the magnitude change in future interest rates.
• B)FIs cannot accurately predict the direction of change in future interest rates.
• C)accounting systems are not accurate enough to allow the calculation of precise gap measures.
• D)it does not recognize timing differences in cash flows within the same maturity grouping.

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Definitions:

Behavioral Disturbance

Behavioral disturbance refers to actions or reactions that are not typical for the individual or situation, often impacting daily functioning or social interactions.

Alcohol Dependence

A medical condition characterized by an impaired ability to stop or control alcohol use despite adverse social, occupational, or health consequences.

Alcohol-Induced Anxiety Disorder

Anxiety disorder precipitated by excessive alcohol intake, often characterized by symptoms that persist during periods of alcohol abstinence.

Significant Clinical Manifestations

Observable signs and symptoms that are critically important for the diagnosis and management of a medical condition.