Use the following bank information for questions . $\begin{array}{|l|l|l|l|l|l|l|l|} \hline &\begin{array}{c} \text { Market } \\ \text { Value } \end{array} &\text { Rate } & \begin{array}{c} \text { Duration } \\ \text { (Years) } \end{array} & \begin{array}{c}\text { Liabilities }\\ \text { and } \\ \text { Equity } \end{array} & \begin{array}{c} \text { Market } \\ \text { Value } \end{array} & \text { Rate } & \begin{array}{c} \text { Duration } \\ \text { (Years) } \end{array} \\ \hline\text { Cash } & \$ 150 & && \text {Time Deposits } & \$ 500 & 4 \% & 1.25 \\ \hline \text { Loans } & \$ 675 & 10 \% & 2.50 &\text { CDs } & \$ 400 & 6 \% & 3.00 \\ \hline\text { T-Bonds }&\$175&5\%&5.00&\text { Equity }&\$100&&\\ \hline\text { Total }&\$1,000&&&&\$1,000\\ \hline \end{array}$ -What is the weighted average duration of liabilities?

A) 1.25 years B) 2.03 years C) 2.12 years D) 3.00 years E) 4.25 years A) 1.25 years B) 2.03 years C) 2.12 years D) 3.00 years E) 4.25 years A

Use the following bank information for questions . $\begin{array}{|l|l|l|l|l|l|l|l|} \hline &\begin{array}{c} \text { Market } \\ \text { Value } \end{array} &\text { Rate } & \begin{array}{c} \text { Duration } \\ \text { (Years) } \end{array} & \begin{array}{c}\text { Liabilities }\\ \text { and } \\ \text { Equity } \end{array} & \begin{array}{c} \text { Market } \\ \text { Value } \end{array} & \text { Rate } & \begin{array}{c} \text { Duration } \\ \text { (Years) } \end{array} \\ \hline\text { Cash } & \$ 150 & && \text {Time Deposits } & \$ 500 & 4 \% & 1.25 \\ \hline \text { Loans } & \$ 675 & 10 \% & 2.50 &\text { CDs } & \$ 400 & 6 \% & 3.00 \\ \hline\text { T-Bonds }&\$175&5\%&5.00&\text { Equity }&\$100&&\\ \hline\text { Total }&\$1,000&&&&\$1,000\\ \hline \end{array}$ -What is the weighted average duration of assets?

A) 2.56 years B) 3.75 years C) 4.85 years D) 5.00 years E) 7.50 years A) 2.56 years B) 3.75 years C) 4.85 years D) 5.00 years E) 7.50 years

Use the following bank information for questions . $\begin{array}{|l|l|l|l|l|l|l|l|} \hline &\begin{array}{c} \text { Market } \\ \text { Value } \end{array} &\text { Rate } & \begin{array}{c} \text { Duration } \\ \text { (Years) } \end{array} & \begin{array}{c}\text { Liabilities }\\ \text { and } \\ \text { Equity } \end{array} & \begin{array}{c} \text { Market } \\ \text { Value } \end{array} & \text { Rate } & \begin{array}{c} \text { Duration } \\ \text { (Years) } \end{array} \\ \hline\text { Cash } & \$ 200 & && \text {Time Deposits } & \$ 600 &2.0 \% & 1.500 \\ \hline \text { Loans } & \$ 800 & 8.0 \% & 3.750 &\text { CDs } & \$ 500 & 4.5 \% & 3.125 \\ \hline\text { T-Bonds }&\$250&4.0\%&7.250&\text { Equity }&\$150&&\\ \hline\text { Total }&\$1,250&&&&\$1,250\\ \hline \end{array}$ -What is the bank's duration gap?

A) 0.53 B) 0.73 C) 0.91 D) 1.88 E) 4.58 A) 0.53 B) 0.73 C) 0.91 D) 1.88 E) 4.58

A) estimates when embedded options will be used. B) directly indicates how much the price of a security will change given a change in interest rates. C) is always greater than maturity. D) is a weighted average of the time until cash flows are received. E) All of the above A) estimates when embedded options will be used. B) directly indicates how much the price of a security will change given a change in interest rates. C) is always greater than maturity. D) is a weighted average of the time until cash flows are received. E) All of the above

A) is a weighted average of the time until cash flows are received. B) is always greater than maturity. C) is never equal to maturity. D) directly indicates how much the price of a security will change given a change in interest rates. E) estimates when embedded options will be used. A) is a weighted average of the time until cash flows are received. B) is always greater than maturity. C) is never equal to maturity. D) directly indicates how much the price of a security will change given a change in interest rates. E) estimates when embedded options will be used.