If the Chosen Maturity Buckets Have a Time Period That

question 30

Multiple Choice

If the chosen maturity buckets have a time period that is too long, the repricing model may produce inaccurate results because

• A)as the time to maturity increases, the price volatility increases.
• B)price changes will be overestimated.
• C)there may be large differentials in the time to repricing for different securities within each maturity bucket.
• D)the FI will be unable to accurately measure the quantity of rate-sensitive assets.
• E)the FI will be unable to accurately measure the quantity of rate-sensitive liabilities.

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Definitions:

Identifiability Bias

The cognitive bias that causes people to overvalue individual stories and examples over general statistics and broader information.

Emotional Contagion

The phenomenon where emotions can be spread from one person to another, influencing or mimicking the emotional states felt by those around us.

Hostile Perception Bias

The tendency to interpret others' behaviors as aggressive or confrontational, even when no hostility is intended.

Aggressive Nature

The predisposition to act in a hostile or combative manner towards others.