The Bank Has a Positive Repricing Gap

question 53

Multiple Choice

The bank has a positive repricing gap.Is it exposed to interest rate increases or decreases and why?

• A)Interest rate increases because the interest income on its assets will rise more than the interest expenses on its liabilities and net interest income will rise.
• B)Interest rate increases because the interest income on its assets will fall more than the interest expenses on its liabilities and net interest income will fall.
• C)Interest rate decreases because the interest income on its assets will rise more than the interest expenses on its liabilities and net interest income will rise.
• D)Interest rate decreases because the interest income on its assets will fall more than the interest expenses on its liabilities and net interest income will fall.

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Definitions:

High-Quality Cars

Vehicles that are manufactured with superior craftsmanship, materials, and technology, often providing enhanced performance, comfort, and safety features.

Demand Curves

Graphical representations showing the relationship between the price of a good and the quantity demanded by consumers at those prices.

Average Quality

The mean level of value or performance of a product or service, typically assessed over a specific period or set of conditions.

Credit Histories

Records that document an individual's or company's past borrowing and repayments, used by lenders to evaluate creditworthiness.