9-67 Which of the Following Statements Is True

question 109

Multiple Choice

9-67 Which of the following statements is true?

• A)The optimal duration gap is zero.
• B)Duration gap measures the impact of changes in interest rates on the market value of equity.
• C)The shorter the maturity of the FI's securities,the greater the FI's interest rate risk exposure.
• D)The duration of all floating rate debt instruments is equal to the time to maturity.
• E)The duration of equity is equal to the duration of assets minus the duration of liabilities.

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Definitions:

Economy

The system of production, distribution, and consumption of goods and services in a particular geographic region or country.

Factor Markets

Markets where services of the factors of production (notably labor, land, and capital) are bought and sold.

New York Mets

A professional baseball team based in New York City, part of the National League division of Major League Baseball.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services for profit.