One Method of Changing the Positive Leverage Adjusted Duration Gap

question 12

True/False

One method of changing the positive leverage adjusted duration gap for the purpose of immunising the net worth of a typical depository institution is to increase the duration of the assets and to decrease the duration of the liabilities.

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Definitions:

Ties

In business and economics, may refer to agreements or relationships between entities that link their interests or operations.

Cross Elasticity

An indicator showing the sensitivity of the demand for one product in relation to the price alteration of another product, revealing whether they are substitutes or complementary goods.

Quantity Demanded

The overall quantity of a product or service that buyers are ready and capable of buying at a specific price.

Price Change

Refers to the variation in the cost of a good or service over time.