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

Which of the following statements is TRUE?A.A positive repricing gap implies that a decrease in interest rates will cause interest expense to decrease more than the decrease in interest income. B.When the Reserve Bank finds it necessary to slow economic activity, it allows interest rates to fall. C.The repricing model estimates the difference between interest earned and interest paid during a given period of time. D.The repricing model is a simplistic approach to focusing on the exposure of net interest income to changes in market levels of interest rates for given maturity periods. E.If the average maturity of assets is 4 years and the average maturity of liabilities is 4 years, then the FI has no interest rate risk exposure.

The term 'interest rate risk' is associated withMultiple Choicevariable-return investments like common stocks and mutual funds.fluctuations in market price.floating rate bonds.fluctuations in inflation.fixed-return investments like government and corporate bonds

Risk structure of interest rate

All of the statements below are not false, except:I. Changes in interest rates represent a risk for both borrowers and investors because of diminishing investment prospects and increased cost of borrowing;II. Failure to pay accounts receivable on time by customers may have a significant negative impact on the capital base of a company;III. Companies involved in cross-border trades are subject to FX risks;IV. It is essential for banks to assess the creditworthiness of customers to mitigate the credit risk;V. Liquidity is an important consideration not only for a central bank but for other financial institutions as well. Question 1Select one:a.Only II and Vb.Only I c.Only Vd.All of the statements are truee.All of the statements are false

The following is market risk exceptAnswer :Price risk   Credit risk  Currency risk   Interest rate risk