An FI Has a Leverage-Adjusted Duration Gap of 1

question 57

Multiple Choice

An FI has a leverage-adjusted duration gap of 1.21 years, $60 million in assets, 7 per cent equity to assets ratio, and market rates are 8 per cent. What is the impact on the dealer's market value of equity per $100 of assets if the relative change in all interest rates is an increase of 0.5 per cent [i.e., R/(1+R) = 0.5 per cent]?

• A) +$336 111
• B) -$0.605
• C) -$336 111
• D) +$0.605

Acquaint with the principle of standard costing system and its application to direct materials and labor.

Understand the impact of activity levels on budget variances and efficiency.

Learn the process of evaluating performance through variance analysis of manufacturing overhead.

Understand the concept of flexible budgets and how they adjust to different levels of activity.

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Definitions:

Illegality of Object

The principle that a contract is void if it involves actions or outcomes that are illegal or against public policy.

Cocaine

Cocaine is a powerful stimulant drug derived from the leaves of the coca plant, often used recreationally for its euphoric effects but illegal in many jurisdictions.

Rescission

The act of cancelling a contract, returning all parties to their pre-contractual state, often due to mistakes, fraud, or misrepresentation.

Fraudulent Misrepresentation

False statements or claims made deceitfully to induce another party into a contract, leading to harm or loss.