Consider an Asset with a Current Market Value of $250

question 55

Multiple Choice

Consider an asset with a current market value of $250 000 and a duration of 3.3 years. Assume the asset is partially funded through zero-coupon bonds which currently sells for $225 000 and has a maturity of 4 years. The current discount rate is 15 per cent. Calculate the duration gap for this scenario:

• A) -0.3 years
• B) 0.3 years
• C) -0.7 years
• D) 0.7 years

---

Definitions:

Guidance Center

A facility offering a range of psychological, counseling, or educational services aimed at providing individuals with assistance in personal development, coping strategies, and life management skills.

Schizophrenic Patients

Individuals diagnosed with schizophrenia, a disorder characterized by delusions, hallucinations, disordered thinking, and significant social or occupational dysfunction.

Sigmund Freud

An Austrian neurologist who founded the discipline of psychoanalysis, known for his theories of the unconscious mind and the mechanism of repression.

Identity Crises

A period of uncertainty and confusion in which a person's sense of identity becomes insecure, typically due to a change in their expected aims or role in society.