HW_11_Questions_Chapters_24_25[1]

HW_11_Questions_Chapters_24_25[1] - HW 11 Chapter 24...

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HW 11 Chapters 24, 25 Chapter 24 Quantitative Problems 10-11, 26 Chapter 25 Quantitative problems Questions 5-9, 28 1. In gap analysis, the gap is the difference between a bank's assets and liabilities. rate-sensitive assets and rate-sensitive liabilities rate-sensitive assets and fixed-rate assets. long-term and short-term securities. 2. If a bank has more rate-sensitive assets than liabilities, then a fall in interest rates will raise income. a rise in interest rates will lower income. a rise in interest rates will raise income. none of the above is true.
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3. If a bank has an asset with a duration of 0.6 years and a value of $8 million among total assets of $100, then the weighted duration of the asset is 2.083 years. is 0.048 years. is 4.800 years. is 0.080 years. cannot be determined from the information given. 4. Suppose a bank has assets of $150 million, liabilities of $132 million, and a duration gap of 1.50. If interest rates fall from 10 percent to 5 percent, then the market value of net worth will fall by $10.2 million.
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