The Average Duration of the Loans Is 10 Years

question 62

Multiple Choice

The average duration of the loans is 10 years. The average duration of the deposits is 3 years. What is the leveraged-adjusted duration gap of the bank's portfolio?

• A)10 years.
• B)7.3 years.
• C)7 years.
• D)7.18 years.
• E)3 years.

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Definitions:

Sulfonium Salt

A type of ionic compound that contains a positively charged sulfonium ion (a sulfur atom covalently bonded to three organic groups) and a counter anion.

Mechanistic Path

The sequence of elementary steps that lead to the formation of products from reactants, delineating the specifics of a chemical reaction.

Reagents

Additives or chemical entities added to a system aimed at causing a chemical reaction or to examine the possibility of a reaction occurring.

Synthesis

The process of combining simpler substances chemically to form a new, more complex substance.