Home About Contact Us Disclaimer Privacy Policy Terms & Conditions Blog Submit MCQs
GK MCQs Pak Study Islamic Study Everyday Science
Current Affairs
Pakistan & World Affairs 2025 Pakistan & World Affairs 2024 Pakistan & World Affairs 2023
PAST PAPERS
PPSC Past Papers FPSC Past Papers CSS Past Papers NTS Past Papers KPPSC Past Papers
MORE SUBJECTS
Urdu MCQs Geography MCQs English MCQs Pedagogy MCQs Computer MCQs
BLOG
Study Tips
Search Login

MAIN MENU

SUBJECTS MCQs

PUBLIC SERVICE COMMISSIONS

PAST PAPERS

Global Search Engine

Your Favorite Questions

Home > Finance > Question

A bank has assets with 5-year duration and liabilities with 2-year duration. What is the duration gap:

0
A) 2 years
B) 1 year
C) 6 years
D) 3 years

Correct Answer: D) 3 years

• The Duration Gap is calculated simply by subtracting the duration of liabilities from the Duration of assets. • Mathematically: 5 years (Assets) - 2 years (Liabilities) exactly equals a gap of 3 years. • A positive duration gap heavily implies that bank equity drops if prevailing Interest rates rise. • This metric is heavily utilized by commercial banks for managing their comprehensive Interest rate risk.

« Prev Next »

Advertisement

[ Ad Banner Space ]

Discussion (0)

Discussion mein hissa lene ke liye login karna zaroori hai.

Login / Register

Koi comment nahi. Sab se pehle aap apna comment karein!

Related Questions

Sub Categories

Leave a Reply / Ask a Question