Which of the Following Describes the Condition Known as Runoff

question 29

Multiple Choice

Which of the following describes the condition known as runoff in the repricing model approach to measuring interest rate risk of an FI?

• A)Periodic cash flow of interest and principal amortization payments on long-term assets that can be reinvested at market rates.
• B)The effect that a change in the spread between rates on RSAs and RSLs has on net interest income as interest rates change.
• C)Mismatch of asset and liabilities within a maturity bucket.
• D)The relations between changes in interest rates and changes in net interest income.
• E)Those deposits that act as an FI's long-term sources of funds.

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Definitions:

Cultural Filter

The influence of cultural backgrounds on how individuals perceive and interpret information.

Incongruent

Not in harmony or agreement; differing in attitudes, values, or actions that are not aligned or consistent.

Psychotic Behaviors

Manifestations of severe mental disorders involving loss of contact with reality, delusions, and hallucinations.

Offering Self

The act of providing one’s attention, presence, or support to others without expecting anything in return.