Which of the Following Is True Regarding Duration Gap Analysis

question 13

Multiple Choice

Which of the following is true regarding duration gap analysis?

• A) The magnitude of the duration gap is related to the amount of interest rate risk a bank is subject to.
• B) Management can adjust the duration gap to speculate on future interest rate changes.
• C) A positive duration gap means a bank's market value of equity will decrease with an increase in interest rates.
• D) All of the above are true.
• E) a. and c.

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Definitions:

Titular Democracies

Political systems that have the formal appearance of a democracy through elections and institutions, but lack substantive democratic practices, such as respect for civil liberties and genuine political competition.

Collective Freedoms

The rights and liberties shared by a community or society as a whole, facilitating the collective pursuit of well-being and common goals.

Economic Development

The process by which a country improves the economic, social, and political well-being of its people through growth and the efficient management of resources.

Social Classes

Categories of individuals in a society distinguished by relative position or status, often determined by wealth, occupation, education, or familial lineage.