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FINA 365 Chapter 8 Exam with Questions and Answers 37. The net worth of a bank is the difference between the A. value of retained earnings and the provision for loan losses. B. market value of assets and the market value of liabilities. C. book value of assets and book value of liabilities. D. rate-sensitive assets and rate-sensitive liabilities. E. None of the above. ANSWER✓✓ market value of assets and the market value of liabilities. 38. Because of its simplicity, smaller depository institutions still use this model as their primary measure of interest rate risk. A. The repricing model. B. The maturity model. C. The duration model. D. The convexity model. E. The option pricing model. ANSWER✓✓ The repricing model. 39. 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.
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