If interest rates increase from 9 percent to 10 percent, a bank with a duration gap of 2 years would experience a decrease in its net worth of
A) 0.9 percent of its assets.
B) 0.9 percent of its liabilities.
C) 1.8 percent of its liabilities.
D) 1.8 percent of its assets.
D
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A normative economic statement is
a. a statement of fact b. a statement of opinion which advocates a particular position c. not acceptable in the economics profession d. the only acceptable manner to present economic information e. a statement based upon government-supplied information
If the index of leading indicators and other forecasting devices suggested that the economy is moving into an inflationary boom, activists' economic policy would call for
a. a decrease in money supply growth and a tax increase. b. an increase in money supply growth and a shift toward a budget deficit. c. an increase in money supply growth and a tax decrease. d. a continuation of the policies already in place.