Multiple Choice
Which of the following statements about leverage adjusted duration gap is true?
A) It is equal to the duration of the assets minus the duration of the liabilities.
B) The larger the gap in absolute terms, the more exposed the FI is to interest rate shocks.
C) It reflects the degree of maturity mismatch in an FI's balance sheet.
D) It indicates the dollar size of the potential net worth and its value is equal to duration divided by (1+R) .
Correct Answer:

Verified
Correct Answer:
Verified
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