-What Is the Repricing Gap If a 1-Year Maturity Gap

question 108

Multiple Choice

$$\begin{array} { | l | c | l | l | c | c | } \hline & \text { Face Value } & \begin{array} { l } \text { Runoff } \\< \mathbf { 1 } \text { year }\end{array} & & \text { Face Value } & \begin{array} { c } \text { Runoff } \\< \mathbf { 1 } \text { year }\end{array} \\\hline \text { 3-mo. T-Bills } & \$ 60 \mathrm {~m} & & \text { Demand Dep. } & \$ 180 \mathrm {~m} & 10 \text { percent } \\\hline \text { 2-yr Bonds } & \$ 60 \mathrm {~m} & 5 \text { percent } & \text { Equity } & \$ 20 \mathrm {~m} & \\\hline \text { 5-yr Bonds } & \$ 80 \mathrm {~m} & 10 \text { percent } & & & \\\hline\end{array}$$
-What is the repricing gap if a 1-year maturity gap is used if runoffs are also considered?

• A)-22 million.
• B)+$22 million.
• C)+$53 million.
• D)-$40 million.
• E)-$70 million.

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Definitions:

Natural Rate of Unemployment

The long-term rate of unemployment around which the labor market is in balance, reflecting the number of people who are naturally jobless due to factors such as frictional and structural unemployment.

Money Supply Growth Rate

The rate at which the amount of money available in an economy increases over a specific period.

Short-run Economy

The period in which the quantities of at least one input, such as capital, is fixed and firms adjust only labor inputs to change output levels.

Money Supply Growth Rate

The speed at which available monetary resources in an economy grow over a determined time frame.