Because of its simplicity, smaller deposit-taking institutions still use this model as their primary measure of interest rate risk.

Question

Quizplus · Accepted Answer

The repricing model is the simplest and most commonly used model for measuring interest rate risk, particularly for smaller deposit-taking institutions. It focuses on the repricing of assets and liabilities within predetermined time intervals, rather than considering the maturity or duration of specific instruments. This makes it easier to implement and understand for institutions with less complex balance sheets.

Because of Its Simplicity, Smaller Deposit-Taking Institutions Still Use This