Use the Following Bank Information for Questions -What Is the Bank's Duration Gap?
A) 0

question 12

Multiple Choice

Use the following bank information for questions .
$\begin{array}{|l|l|l|l|l|l|l|l|}\hline &\begin{array}{c}\text { Market } \\\text { Value }\end{array} &\text { Rate } & \begin{array}{c}\text { Duration } \\\text { (Years) }\end{array} & \begin{array}{c}\text { Liabilities }\\\text { and } \\\text { Equity }\end{array} & \begin{array}{c}\text { Market } \\\text { Value }\end{array} & \text { Rate } & \begin{array}{c}\text { Duration } \\\text { (Years) }\end{array} \\\hline\text { Cash } & \$ 200 & && \text {Time Deposits } & \$ 600 &2.0 \% & 1.500 \\\hline \text { Loans } & \$ 800 & 8.0 \% & 3.750 &\text { CDs } & \$ 500 & 4.5 \% & 3.125 \\\hline\text { T-Bonds }&\$250&4.0\%&7.250&\text { Equity }&\$150&&\\\hline\text { Total }&\$1,250&&&&\$1,250\\\hline\end{array}$
-What is the bank's duration gap?

• A) 0.53
• B) 0.73
• C) 0.91
• D) 1.88
• E) 4.58