Assume a Bank Has $200 Million of Assets with a Duration

question 116

Multiple Choice

Assume a bank has $200 million of assets with a duration of 2.5,and $190 million of liabilities with a duration of 1.05. The duration gap for this bank is

• A)0.5 year.
• B)1 year.
• C)1.5 years.
• D)2 years.

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Definitions:

Consumption Changes

Variations in the amount and types of goods and services used by households over time.

Barley Crop

A cereal grain that is used worldwide as fodder for animals, as a source of fermentable material for beer and certain distilled beverages, and as a component of various health foods.

Aggregate Demand

The total demand for all goods and services within an economy at a given overall price level and in a given time period.

Demand Function

A mathematical expression that describes the relationship between the quantity of a good demanded and its price, along with other factors such as income and prices of related goods.