One of the Problems in Conducting a Duration Gap Analysis

question 59

Multiple Choice

One of the problems in conducting a duration gap analysis is that the duration gap is calculated assuming that interest rates for all maturities are the same. That means that the yield curve is

• A)flat.
• B)slightly upward sloping.
• C)steeply upward sloping.
• D)downward sloping.

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Definitions:

Dividend Income

Income received from owning shares in a corporation, typically paid out from the company's profits.

Shares Purchased

Refers to the acquisition of ownership units in a corporation, typically through transactions on stock exchanges.

Dividend Declared

A payment announced by a company's board of directors to be distributed among shareholders.

Capital in Excess

Funds received by a company from selling shares at a price above the par value, also known as additional paid-in capital.