What is spread effect?
A) Periodic cash flow of interest and principal amortization payments on long-term assets that can be reinvested at market rates.
B) The effect that a change in the spread between rates on RSAs and RSLs has on net interest income as interest rates change.
C) The effect of mismatch of asset and liabilities within a maturity bucket.
D) The premium paid to compensate for the future uncertainty in a security's value.
E) The value of an FI to its owners.
Correct Answer:
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Q74: A bank that finances long-term fixed-rate mortgages
Q75: The repricing model measures the impact of
Q76: The repricing model ignores information regarding the
Q77: If the chosen maturity buckets have a
Q78: An increase in interest rates
A)increases the market
Q80: Which of the following statements is true?
A)An
Q81: What is the weighted average maturity of
Q82: Total one-year rate-sensitive assets is
A)$540 million.
B)$580 million.
C)$555
Q83: The gap ratio is
A).015.
B)-.015.
C).025.
D)-.144.
E).154.
[Reference: 8-84]
Q84: Total one-year rate-sensitive liabilities is
A)$540 million.
B)$580 million.
C)$555
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