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.

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Definitions:

Water-Soluble Paint

Paint that can be dissolved, thinned, or cleaned up with water, rather than requiring chemicals or solvents.

Living Sculpture

Artistic works that include living organisms, such as plants or even animals, as part of their composition, blurring the lines between art and life.

National Endowment

The collective wealth, assets, or resources that a country possesses, which can contribute to its economic development and welfare.

Labor Costs

The total expenditure incurred by employers for the compensation of employees, including wages, benefits, and taxes.