What Is Spread Effect

Multiple Choice

What is spread effect?

A) Periodic cash flow of interest and principal amortisation payments on long-term assets that can be reinvested at market rates.
B) The effect that a change in the spread between rates on rate-sensitive assets and rate-sensitive liabilities has on net interest income as interest rates change.
C) The effect of mismatch of asset and liabilities within a maturity bucket.
D) The premium paid to compensate for the future uncertainty in a security's value.