An FI Has a Leverage-Adjusted Duration Gap of 1 $\Delta$ R/(1+R) = 0

question 68

Multiple Choice

An FI has a leverage-adjusted duration gap of 1.21 years, $60 million in assets, 7% equity to assets ratio, and market rates are 8%.What is the impact on the dealer's market value of equity per $100 of assets if the relative change in all interest rates is an increase of 0.5% [i.e. $\Delta$ R/(1+R) = 0.5%]?

• A)+$336 111
• B)-$0.605
• C)-$336 111
• D)+$0.605

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Definitions:

Multiple Channel Approach

A marketing strategy that uses several distinct channels to reach and serve customers, such as physical stores, online platforms, and mobile applications.

Product Distribution

The process of making a product available for purchase by dispersing it through the market.

Business Products

Goods and services intended primarily for use in the production of other goods or services, rather than for consumer use.

Convenience Goods

Convenience goods are consumer items that are widely available and purchased frequently with minimal effort, such as groceries and basic household items.