If a Bank Has a Duration Gap of 2 Years,then

question 68

Multiple Choice

If a bank has a duration gap of 2 years,then a rise in interest rates from 6 percent to 9 percent will lead to

• A) a rise in the market value of its net worth of 5.66 percent.
• B) a rise in net interest income of 5.66 percent.
• C) a fall in the market value of its net worth of 5.66 percent.
• D) a fall in net interest income of 5.66 percent.
• E) an unknown change.