The Bank Has a Negative Repricing Gap

question 18

Multiple Choice

The bank has a negative 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 rise by less 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 rise by less than the interest expenses on its liabilities and net interest income will fall.

---

Definitions:

Alcohol-induced

Conditions or effects directly caused by the consumption of alcohol.

Sexually Transmitted Infection

An infection transmitted through sexual contact, caused by bacteria, viruses, or parasites.

Self-mutilation

The deliberate harm or alteration of one’s own body tissue without suicidal intent.

Sexual Abuse

An undesired sexual behavior by one person upon another, often exerting power, force, or coercion.