A bank has DA = 2.4 years and DL = 0.9 years. The bank has total equity of $82 million and total assets of $850 million. Interestrates are at 6 percent.To get DE to equal zero to protect the equity value in the event of an interest rate change, the bank could:Multiple ChoiceОreduce Dд to 1.21 years.оincrease DL to 3.10 years.оincrease Dд to 2.44 years.increase D. to 277 are

The duration gap, which is the difference between the durations of assets and liabilities, is a key…

Answered: has DA - 2.4 years ates are at 6…

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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has DA - 2.4 years ates are at 6 percent. To get DE to equal zero to protect the equity value in the event of an interest rate change, the bank could: Multiple Choice reduce DA to 1.21 years. ○ increase D₁ to 3.10 years. C increase D₁ to 2.44 years. incresce n. to 277 unam