The repricing gap fails to consider how the value of fixed-income accounts will change when rates change.

Name: The repricing gap fails to consider how the value of fixed-income accounts will change when rates change.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The repricing gap only focuses on how changes in interest rates will affect the interest income of banks and ignores the potential impact on the value of fixed-income accounts. This can lead to a distorted view of a bank's interest rate risk.

The Repricing Gap Fails to Consider How the Value of Fixed-Income