A bank has an average duration of its liabilities equal to 2 years. The bank's average duration of its assets is 3.5 years. The bank's market value of equity is at risk if _______________________.

A bank has an average duration of its liabilities equal to 2 years. The bank's average duration of its assets is 3.5 years. The bank's market value of equity is at risk if _______________________. 




A. interest rates fall

B. credit spreads fall

C. interest rates rise

D. the price of all fixed-income securities rises








Answer: C


Investment Finance

Learn More Multiple Choice Question :