Question

What is spread effect?

A. Periodic cash flow of interest and principal amortization payments on long-term assets that can be reinvested at market rates.

B. The effect that a change in the spread between rates on RSAs and RSLs has on net interest income as interest rates change.

C. The effect of mismatch of asset and liabilities within a maturity bucket.

D. The premium paid to compensate for the future uncertainty in a security's value.

E. The value of an FI to its owners.

Answer

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