Defining buckets of time over wider intervals creates greater accuracy in the use of the repricing model because fewer calculations are required.

Question

Quizplus · Accepted Answer

Using wider intervals in time buckets for repricing models can reduce the accuracy because it oversimplifies the interest rate risk by not capturing the nuances of rate changes over shorter periods, which can lead to less precise adjustments and risk assessments.

Defining Buckets of Time Over Wider Intervals Creates Greater Accuracy