Chаpter 14: Cоnsider the fоllоwing stаtements regаrding the four primary sources of interest rate risk faced by banks: (i) Repricing risk arises from timing differences in the maturity or repricing of bank assets, liabilities, and off-balance-sheet positions. (ii) Basis risk occurs when unanticipated shifts in the yield curve, such as steepening or flattening, harm a bank's economic value. (iii) Option risk arises from embedded options in bank products, such as fixed-rate mortgage prepayments when market interest rates fall.