Weaknesses of the Repricing Model Include the Fact That

question 57

Multiple Choice

Weaknesses of the repricing model include the fact that
I. it ignores changes in present values caused by changes in interest rates.
II. it ignores different cash flow sensitivities within a maturity bucket.
III. it fails to account for runoffs and prepayments.

• A)I only
• B)I and II only
• C)I and III only
• D)II and III only
• E)I,II,and III

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Definitions:

Domestic Investors

Individuals or entities within a country that allocate their own funds or capital into domestic investments such as stocks, bonds, and real estate.

Foreign Investment

Investment by individuals, firms, or governments in assets or enterprises in a country other than their own, usually for long-term growth or income.

Local Partner

A domestic firm that collaborates with a foreign company to conduct business within the local market.

Exchange Rates

The value of one currency expressed in terms of another currency.