What Is Spread Effect

question 61

Multiple Choice

What is spread effect?

• A)Periodic cash flow of interest and principal amortisation payments on long-term assets that can be reinvested at market rates.
• B)The effect that a change in the spread between rates on rate-sensitive assets and rate-sensitive liabilities has on net interest income as interest rates change.
• C)The effect of mismatch of asset and liabilities within a maturity bucket.
• D)The premium paid to compensate for the future uncertainty in a security's value.

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Definitions:

Interviewing Debtors

The process of questioning individuals who owe money to determine their ability to repay debts, often conducted by creditors or collection agencies.

Bankruptcy Law

A body of laws governing the process through which individuals or entities who cannot repay debts to creditors may seek relief from some or all of their debts.

Reviewing Insurance Contracts

The process of examining insurance agreements to understand the terms, coverage, exclusions, and responsibilities outlined within.

Government Insurance Regulations

Laws and policies set by government bodies to oversee and control the insurance industry, ensuring fairness, solvency, and consumer protection.