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Question
Which of the following describes the condition known as runoff in the repricing model approach to measuring interest rate risk of an FI?
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. Mismatch of asset and liabilities within a maturity bucket.
D. The relations between changes in interest rates and changes in net interest income.
E. Those deposits that act as an FI's long-term sources of funds.
Answer
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