A Bank Has a Positive Repricing Gap and Estimates That

question 10

Multiple Choice

A bank has a positive repricing gap and estimates that the spread between RSAs and RSLs will move directly with interest rates. If interest rates fall,the bank's overall NII will

• A)rise.
• B)fall.
• C)be unchanged.
• D)rise or fall depending on the size of the spread effect relative to the size of the CGAP effect.
• E)None of the options are correct.

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