A Bank Has an Average Asset Duration of 5 Years

Multiple Choice

A bank has an average asset duration of 5 years and an average liability duration of 3 years.This bank has total assets of $500 million and total liabilities of $250 million.Currently,market interest rates are 10 percent.What will be this bank's leverage-adjusted duration gap?

A) 2 years
B) -2 years
C) 3.5 years
D) -3.5 years
E) None of the options is correct.