If Interest Rates Increase from 9 Percent to 10 Percent,a

question 91

Multiple Choice

If interest rates increase from 9 percent to 10 percent,a bank with a duration gap of 2 years would experience a decrease in its net worth of

• A)0.9 percent of its assets.
• B)0.9 percent of its liabilities.
• C)1.8 percent of its liabilities.
• D)1.8 percent of its assets.

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Definitions:

Nearsightedness

A common vision condition in which close objects appear clearly, but distant ones do not because of the shape of the eye.

Corneal Ulcer

A serious eye condition involving an open sore on the cornea, often caused by infection.

Infectious Infiltration

The process by which infectious agents enter and spread within a tissue or organ.

Iritis

Inflammation of the iris, the colored part of the eye, which can lead to pain, light sensitivity, and vision problems.