The Average Duration of the Loans Is 10 Years -What Is the Leveraged-Adjusted Duration Gap of the Bank's Portfolio

Multiple Choice

The average duration of the loans is 10 years. The average duration of the deposits is 3 years. $$\begin{array} { | l | r | l | r | } \hline \text { Consumer loans } & \$ 50 \text { million } & \text { Deposits } & \$ 235 \text { million } \\\hline \text { Commercial Loans } & \$ 200 \text { million } & \text { Equity } & \$ 15 \text { million } \\\hline \text { Total Assets } & \$ 250 \text { million } & \text { Total Liabilities \& Equity } & \$ 250 \text { million } \\\hline\end{array}$$
-What is the leveraged-adjusted duration gap of the bank's portfolio?

A) 10 years.
B) 7.3 years.
C) 7 years.
D) 7.18 years.
E) 3 years.