In relation to re-pricing gap analysis which of the following is a constraint on the model?
A) The appropriate planning period.
B) The timing of cash flows within a planning period.
C) The assumption of an even interest rate change.
D) All of the given answers.

Question

Quizplus · Accepted Answer

All of the given answer choices are constraints on the model. The appropriate planning period is important in order to ensure accuracy and relevancy when analyzing interest rate changes. The timing of cash flows within a planning period affects the results of the model, as interest rate changes may have a larger impact on cash flows occurring in the near future versus those occurring later. The assumption of an even interest rate change may not be appropriate in all situations, and may result in inaccurate or incomplete analysis. Therefore, all of these factors need to be taken into consideration in order to create an effective re-pricing gap analysis model.

In Relation to Re-Pricing Gap Analysis Which of the Following