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:

Experiential Purchases

Buying activities or experiences rather than physical goods, aiming for emotional satisfaction or memories.

Material Goods

Physical items produced for sale or use, often considered in the context of personal possessions or wealth.

Happiness

A state of well-being characterized by emotions ranging from contentment to intense joy.

Embarrassment

is a social emotion caused by recognizing a failure to behave according to social standards or expectations, often leading to feelings of shame or self-consciousness.