For a Bank That Has a Positive Duration Gap, a Decrease

question 26

Multiple Choice

For a bank that has a positive duration gap, a decrease in interest rates will cause a(n) _______ in the economic value of assets that is ______ than the _______ in the economic value of liabilities, and a(n) _______ in the economic value of equity.

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

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Definitions:

Salty Soil

Soil that contains a high level of soluble salts, often making it unproductive for agriculture due to its effect on the osmotic balance of plants.

Agricultural Experts

Professionals specializing in the science and practice of farming, including cultivation of the soil for the growing of crops and the rearing of animals to provide food, wool, and other products.

Over Nutrition

A form of malnutrition where the intake of nutrients is oversupplied, leading to health issues such as obesity and related diseases.

Energy Intake

The amount of energy or calories consumed by an organism through food and drink; a crucial factor in nutrition and health.