Which of the following is a weakness of the repricing model to measure interest rate risk?
A)Potential for overaggregation of assets and liabilities within each maturity bucket.
B)It ignores how changes in interest rates affect the market value of assets and liabilities.
C)It ignores the reinvestment of loan interest and principal payments that are reinvested at current market rates.
D)It fails to recognize off-balance-sheet activities that may be rate sensitive.
E)All of the above.

Question

Quizplus · Accepted Answer

The repricing model has several weaknesses, including overaggregation of assets and liabilities, ignoring market value changes due to interest rate shifts, neglecting reinvestment risks, and failing to account for off-balance-sheet activities.

Which of the Following Is a Weakness of the Repricing