Which of the following statements is true?
A)The cumulative repricing gap can also be expressed as a percentage of liabilities.
B)The cumulative repricing gap can also be expressed as a percentage of equity.
C)The cumulative repricing gap can also be expressed as a percentage of assets.
D)None of the listed options are correct.

Question

Quizplus · Accepted Answer

The cumulative repricing gap measures the difference between the amount of rate-sensitive assets and rate-sensitive liabilities at each maturity within a defined time period. It is expressed as a percentage of assets, which means it represents the net position of the institution in terms of its ability to earn interest income from rate-sensitive assets or pay interest expense on rate-sensitive liabilities. Therefore, option C is the correct statement. Options A and B are incorrect because the cumulative repricing gap is not normally expressed as a percentage of liabilities or equity. Option D is incorrect because there is at least one correct statement.

Which of the Following Statements Is True