A bank is facing a forecast of rising interest rates. How should they set the repricing and duration gap?

Name: A bank is facing a forecast of rising interest rates. How should they set the repricing and duration gap?
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Quizplus · Accepted Answer

A positive repricing gap means that more assets than liabilities will reprice in the short term, benefiting from rising rates. A negative duration gap indicates that the bank's assets have a shorter duration than its liabilities, reducing interest rate risk in a rising rate environment.

A Bank Is Facing a Forecast of Rising Interest Rates