8-51 If the chosen maturity buckets have a time period that is too long,the repricing model may produce inaccurate results because
A)as the time to maturity increases,the price volatility increases.
B)price changes will be overestimated.
C)there may be large differentials in the time to repricing for different securities within each maturity bucket.
D)the FI will be unable to accurately measure the quantity of rate sensitive assets.
E)the FI will be unable to accurately measure the quantity of rate sensitive liabilities.

Question

Quizplus · Accepted Answer

If the maturity buckets are too long, there can be significant differences in the time to repricing for different securities within the same bucket, leading to inaccurate repricing model results.

8-51 If the Chosen Maturity Buckets Have a Time Period