With a 6-month maturity bucket, a 9-month fixed rate loan would be considered a ________________ asset and a 30-year mortgage with a rate adjustment in 3 months would be classified as a _______________ asset.

Question

Quizplus · Accepted Answer

A 6-month maturity bucket implies that the institution is interested in assets that can be converted into cash or reinvested in a new asset within 6 months. A 9-month fixed rate loan is not as liquid as a rate-sensitive asset, as it cannot be easily adjusted to changing interest rates. Therefore, it would be considered a fixed-rate asset. On the other hand, a 30-year mortgage with a rate adjustment in 3 months would be classified as rate-sensitive, as its interest rate can be adjusted based on changes in market rates.

With a 6-Month Maturity Bucket, a 9-Month Fixed Rate Loan