Axon Bank has assets of $10 million comprising loans and Treasury bonds. The average duration of these assets is estimated at 9.18 years. The assets are financed with equity and $8 million in deposits and subordinated bonds having an average duration of 1.88 years. Calculate the leverage-adjusted duration gap of Axon Bank. (Give your answer to 2 decimal places. Do not include the unit "years" in your answer.)
Axon Bank has assets of $10 million comprising loans and Treasury bonds. The average duration of these assets is estimated at 9.18 years. The assets are financed with equity and $8 million in deposits and subordinated bonds having an average duration of 1.88 years. Calculate the leverage-adjusted duration gap of Axon Bank. (Give your answer to 2 decimal places. Do not include the unit "years" in your answer.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Axon Bank has assets of $10 million comprising loans and Treasury bonds. The average duration of these assets is estimated at 9.18 years.
The assets are financed with equity and $8 million in deposits and subordinated bonds having an average duration of 1.88 years. Calculate
the leverage-adjusted duration gap of Axon Bank. (Give your answer to 2 decimal places. Do not include the unit "years" in your answer.)
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