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

question 48

Multiple Choice

Use the following bank information for questions .
$\begin{array}{|l|l|l|l|l|l|l|l|}\hline &\begin{array}{c}\text { Market } \\\text { Value }\end{array} &\text { Rate } & \begin{array}{c}\text { Duration } \\\text { (Years) }\end{array} & \begin{array}{c}\text { Liabilities }\\\text { and } \\\text { Equity }\end{array} & \begin{array}{c}\text { Market } \\\text { Value }\end{array} & \text { Rate } & \begin{array}{c}\text { Duration } \\\text { (Years) }\end{array} \\\hline\text { Cash } & \$ 150 & && \text {Time Deposits } & \$ 500 & 4 \% & 1.25 \\\hline \text { Loans } & \$ 675 & 10 \% & 2.50 &\text { CDs } & \$ 400 & 6 \% & 3.00 \\\hline\text { T-Bonds }&\$175&5\%&5.00&\text { Equity }&\$100&&\\\hline\text { Total }&\$1,000&&&&\$1,000\\\hline\end{array}$
-What is the bank's duration gap?

• A) 0.53
• B) 0.73
• C) 0.91
• D) 2.03
• E) 4.58

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