The Repricing Model Ignores Information Regarding the Distribution of Assets

question 2

Multiple Choice

The repricing model ignores information regarding the distribution of assets and liabilities within maturity buckets.This limitation of the model refers to:

• A)market value effect
• B)over-aggregation
• C)runoffs and pre-payments
• D)off-balance-sheet activities

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Definitions:

Equipment Account

An account on the balance sheet that reports the value of equipment a company owns, less any accumulated depreciation.

Discount Taken

A reduction in the billed amount by a buyer, often for early payment, as an incentive from the seller.

Insurance Premium

The amount paid periodically to an insurance company for coverage.

Plant Asset

Long-term tangible assets used in the production of goods or services, such as machinery, buildings, and equipment.