Using reprising gap analysis, a bank's balance sheet is considered liability-sensitive to market interest rate changes, if:
A) more liabilities than assets will be reprised in the near term
B) more assets than liabilities will be reprised in the near term
C) more assets than liabilities have variable rates or short residual maturities
D) non-interest bearing liabilities are greater than non-interest bearing assets

Question

Quizplus · Accepted Answer

A bank's balance sheet is considered liability-sensitive if more liabilities than assets will be reprised in the near term, meaning that liabilities are more sensitive to interest rate changes than assets.

Using Reprising Gap Analysis, a Bank's Balance Sheet Is Considered