Suppose a bank 's assets have an average duration of years, and its liabilities have an average duration of 5 years. Since this bank has a positive duration gap, in market interest rates will decrease bank capital. Select one: O 2; an increase • 10: a decrease O 2; a decrease 10; an increase

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter17: The Management Of Cash And Marketable Securities
Section: Chapter Questions
Problem 1P
icon
Related questions
Question
Suppose a bank 's assets have an average duration of
years, and its liabilities have an average duration of 5 years. Since
this bank has a positive duration gap,
in market interest
rates will decrease bank capital.
Select one:
O 2: an increase
10; a decrease
O 2: a decrease
10; an increase
Transcribed Image Text:Suppose a bank 's assets have an average duration of years, and its liabilities have an average duration of 5 years. Since this bank has a positive duration gap, in market interest rates will decrease bank capital. Select one: O 2: an increase 10; a decrease O 2: a decrease 10; an increase
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Effective Annual Rate Of Return
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT