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      Question

      An asset or liability is considered "rate sensitive"

      if:
      A It is non-performing for 90 days Correct Answer Incorrect Answer
      B It is held in the Base Layer Correct Answer Incorrect Answer
      C The interest rate resets contractually during the interval Correct Answer Incorrect Answer
      D It is a high-quality liquid asset Correct Answer Incorrect Answer
      E It is guaranteed by the Central Government Correct Answer Incorrect Answer

      Solution

      An asset or liability shall be considered rate sensitive if: (1) There is a cash flow within the time interval under consideration; (2) The interest rate resets / reprices contractually during the interval; (3) The rate is dependent on changes in the Policy rates by the Reserve Bank; (4) It is contractually pre-payable or withdrawable before the stated maturities.

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