What Conclusions Can You Draw from the Duration Gap in Your

question 90

Multiple Choice

What conclusions can you draw from the duration gap in your answer to the previous question?

• A)The market value of the dealer's equity decreases slightly if interest rates fall.
• B)The market value of the dealer's equity becomes negative if interest rates rise.
• C)The market value of the dealer's equity decreases slightly if interest rates rise.
• D)The market value of the dealer's equity becomes negative if interest rates fall.
• E)The dealer has no interest rate risk exposure. [Refer to: 9-80]

Understand the nature of goods (normal, inferior, Giffen) through consumer's reactions to income changes.

Apply the concept of utility maximization to solve for quantities demanded of goods.

Analyze the effects of specific spending patterns or consumption constraints on utility and choice.

Understand homothetic preferences and their implications for consumer behavior across different income levels.

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