A Risk Manager Could Restructure Assets and Liabilities to Reduce

question 43

Multiple Choice

A risk manager could restructure assets and liabilities to reduce interest rate exposure for this example by

• A)increasing the average duration of its assets to 9.56 years.
• B)decreasing the average duration of its assets to 4.00 years.
• C)increasing the average duration of its liabilities to 6.78 years.
• D)increasing the average duration of its liabilities to 9.782 years.
• E)increasing the leverage ratio, k, to 1.
• [Refer to: 9-121]

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Definitions:

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An entrepreneur's ability to notice and take advantage of new business opportunities not seen by others.

Barriers Entry

Obstacles companies must overcome to enter a particular market, which may include high startup costs, regulation, or strong competition.

Infinite Number

A quantity without end or limit, often used in mathematics to describe sizes or quantities larger than any finite number.

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