ACI
3I0-012 · Question #187
3I0-012 Question #187: Real Exam Question with Answer & Explanation
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Question
When considering interest rate risk in the banking book, retail demand deposits without fixed contractual maturity:
Options
- Ashould be assumed to have zero duration
- Bshould be treated like other instantly variable rate liabilities, such as overnight money market borrowing.
- Cshould be assumed to have a low correlation with money market reference rates
- Drepresent a minor contributor to interest rate risk and can safely be disregarded
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