8-18 Because the Repricing Model Ignores the Market Value Effect

question 23

True/False

8-18 Because the repricing model ignores the market value effect of changing interest rates,the repricing gap is an incomplete measure of the true interest rate risk exposure of an FI.

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Definitions:

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without any learning needed.

Conditioned Stimulus

A previously neutral stimulus that, after association with an unconditioned stimulus, comes to trigger a conditioned response.

Innate Response

Natural or instinctive reactions that organisms are born with, not learned through experience.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without any prior learning or conditioning.