8-56 Which of the Following Is a Weakness of the Repricing

question 60

Multiple Choice

8-56 Which of the following is a weakness of the repricing model to measure interest rate risk?

• A)Potential for overaggregation of assets and liabilities within each maturity bucket.
• B)It ignores how changes in interest rates affect the market value of assets and liabilities.
• C)It ignores the reinvestment of loan interest and principal payments that are reinvested at current market rates.
• D)It fails to recognize off-balance-sheet activities that may be rate sensitive.
• E)All of the above.

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Definitions:

Sales Revenue

The total amount of money a company receives from its sales of goods or services before any expenses are subtracted.

Cross-Footing

A bookkeeping process that involves checking the mathematical accuracy of figures in financial statements by ensuring that sums of columns and rows respectively match.

Cash Receipts Journal

A specialized accounting journal used to record all receipts of cash.

Equality

In financial terms, refers to the state where two values, amounts, or figures are of the same value or balance each other out.