Which of the following statements is true?
A)The major focus of the repricing gap is the capital loss effect.
B)The major focus of the repricing gap is the capital gains effect.
C)The repricing gap focuses on all three, the capital gains, the capital loss and the interest income effect.
D)The major focus of the repricing gap is the interest income effect.

Question

Quizplus · Accepted Answer

The repricing gap focuses on the impact of interest rate changes on net interest income, so the correct choice is D - the major focus of the repricing gap is the interest income effect. Choices A and B are incorrect because they only focus on the capital loss or capital gain effect, which is only one component of the overall impact on net interest income. Choice C is also incorrect because it overstates the focus of the repricing gap by including all three effects.

Which of the Following Statements Is True