An FI Has Financial Assets of $800 and Equity of $50.If

question 16

Multiple Choice

An FI has financial assets of $800 and equity of $50.If the duration of assets is 1.21 years and the duration of all liabilities is 0.25 years,what is the leverage-adjusted duration gap?

• A)0.9000 years.
• B)0.9600 years.
• C)0.9756 years.
• D)0.8844 years.

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Definitions:

Regression

A statistical method used to model and analyze relationships between variables.

Obtained Value

The actual value or result achieved in an experiment or study, typically used in statistical analysis to compare against theoretical values.

Critical Value

The threshold value that the test statistic must exceed in order for the null hypothesis to be rejected in a hypothesis test.

Significance Level

The threshold chosen by the researcher for rejecting the null hypothesis; commonly set at 0.05 or 5%.