Calculate the Leverage-Adjusted Duration Gap to Four Decimal Places and State

question 112

Multiple Choice

Calculate the leverage-adjusted duration gap to four decimal places and state the FI's interest rate risk exposure of this institution.

• A)+1.0308 years; exposed to interest rate increases.
• B)−0.3232 years; exposed to interest rate increases.
• C)+0.8666 years; exposed to interest rate increases.
• D)+0.4875 years; exposed to interest rate increases.
• E)−1.3232 years; exposed to interest rate decreases.
• [Refer to: 9-115]

---

Definitions:

Total Commitment

A state of being wholly dedicated to a cause or activity with the entirety of one's resources, energy, and being.

Plausible Conception

A notion or idea that appears credible or believable.

Problem Of Evil

The dilemma that emerges from trying to reconcile the belief that God is omnipotent, omniscient, and just with the suffering and evil in the world.

Separate From

To distinguish or differentiate between entities or concepts, making clear the distinction or division between them.