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The Chief Risk Officer (CRO) of a local financial institution wants to ensure the assumptions used in the bank's economic capital models are dependable. The CRO has asked a member of the verification team to thoroughly review the bank's approach to assessing interest rate risk in its banking book and verify the assumptions used in its interest rate models. Among the following, which assumption would be the most appropriate for the bank to implement?
A
The bank changes the interest rate it offers to depositors by the full amount of any change in market interest rates.
B
The bank models its retail non-maturity deposits as floating-rate, putable bonds.
C
The bank assumes that its residential mortgages exhibit positive convexity as interest rates decrease.
D
The bank models its interest rate risk in the banking book independently from its credit risk.