Interest rate risk arises from differences between the timing of rate changes and the timing of cash flows ( _________ );from changing rate relationships among different yield curves affecting bank activities ( ____________ ); from changing rate relationship across the spectrum of maturities ( ____________ );and from internet-related options embedded in bank products ( _____________ ). Choose the appropriate set.

Question

Quizplus · Accepted Answer

Repricing risk arises from timing differences in rate changes and cash flows; basic risk from changing rate relationships among yield curves; yield curve risk from changing rate relationships across maturities; and option risk from options embedded in products.

Interest Rate Risk Arises from Differences Between the Timing of Rate