The repricing gap approach calculates the gaps in each maturity bucket by subtracting the
A)current assets from the current liabilities.
B)long term liabilities from the fixed assets.
C)rate-sensitive assets from the total assets.
D)rate-sensitive liabilities from the rate-sensitive assets.
E)current liabilities from tangible assets.

Question

Quizplus · Accepted Answer

The repricing gap approach calculates the gaps in each maturity bucket by subtracting the rate-sensitive liabilities from the rate-sensitive assets. This approach helps to assess the interest rate risk exposure of a financial institution.

The Repricing Gap Approach Calculates the Gaps in Each Maturity