The smaller the leverage-adjusted duration gap, the more exposed the FI is to interest rate shocks.

Name: The smaller the leverage-adjusted duration gap, the more exposed the FI is to interest rate shocks.
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The leverage-adjusted duration gap measures the sensitivity of an FI's (Financial Institution's) equity to changes in interest rates. A smaller gap indicates less exposure to interest rate shocks, as it suggests that the durations of assets and liabilities are more closely matched.

The Smaller the Leverage-Adjusted Duration Gap, the More Exposed the FI