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Question
First Duration, a securities dealer, has a leverage-adjusted duration gap of 1.21 years, $60 million in assets, 7 percent equity to assets ratio, and market rates are 8 percent.
What is the impact on the dealer's market value of equity per $100 of assets if the change in all interest rates is an increase of 0.5 percent [i.e., ΔR = 0.5 percent]
A. +$336,111.
B. -$0.605.
C. -$336,111.
D. +$0.605.
E. -$363,000.
Answer
This answer is hidden. It contains 106 characters.
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