For a Bank That Has a Negative Duration Gap, an Increase

question 28

Multiple Choice

For a bank that has a negative duration gap, an increase in interest rates will cause a(n) _______ in the economic value of assets, a(n) _______ in the economic value of liabilities, and a(n) _______ in the economic value of equity.

• A)increase, decrease, increase
• B)increase, increase, decrease
• C)increase, increase, increase
• D)decrease, decrease, increase
• E)decrease, increase, decrease

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