Using the balance sheet below for a financial institution, and the duration of asset is 3.5 years, the duration of liabilities .5 years. Assets Reserves T-bills Mortgages Liabilities 5 m Money Market Deposits 5 m 50 m 1-year CDs 85 m 40 m Capital 10 m 5 m Commercial Loans What is the Duration Gap of this company? greater than 3 years 3 years O less than 3 years

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
ChapterM: Time Value Of Money Module
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Using the balance sheet below for a financial institution, and the duration of asset is 3.5 years,
the duration of liabilities .5 years.
Assets
Reserves
T-bills
Mortgages
Liabilities
5 m
Money Market Deposits 5 m
50 m
1-year CDs
85 m
40 m
Capital
10 m
5 m
Commercial Loans
What is the Duration Gap of this company?
greater than 3 years
3 years
O less than 3 years
Transcribed Image Text:Using the balance sheet below for a financial institution, and the duration of asset is 3.5 years, the duration of liabilities .5 years. Assets Reserves T-bills Mortgages Liabilities 5 m Money Market Deposits 5 m 50 m 1-year CDs 85 m 40 m Capital 10 m 5 m Commercial Loans What is the Duration Gap of this company? greater than 3 years 3 years O less than 3 years
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