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

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

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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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

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