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If the Duration GAP for a bank is positive and interest rates rise, the value of the bank's equity would be expected to: A) Would fall because the value of assets would fall more than the value of liabilities B) Would fall because the value of assets would rise less than the value of liabilities Would rise because the value of accots would

If the Duration GAP for a bank is positive and interest rates rise, the value of the bank's equity would be expected to: A) Would fall because the value of assets would fall more than the value of liabilities B) Would fall because the value of assets would rise less than the value of liabilities Would rise because the value of accots would

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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If the Duration GAP for a bank is positive and interest rates rise, the value of the bank's equity would be expected to: A) Would fall because the value of assets would fall more than the value of liabilities B) Would fall because the value of assets would rise less than the value of liabilities C) Would rise because the value of assets would rise more than the value of liabilities D) Would rise because the value of assets would fall less than the value of liabilities
Transcribed Image Text:If the Duration GAP for a bank is positive and interest rates rise, the value of the bank's equity would be expected to: A) Would fall because the value of assets would fall more than the value of liabilities B) Would fall because the value of assets would rise less than the value of liabilities C) Would rise because the value of assets would rise more than the value of liabilities D) Would rise because the value of assets would fall less than the value of liabilities
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