If the FI finances a $500,000 2-year loan with a $400,000 1-year CD and equity, what is the leveraged adjusted duration gap of this position? Use your answer to the previous question.

Question

Quizplus · Accepted Answer

The leveraged adjusted duration gap is calculated by considering the duration of assets and liabilities, and the proportion of equity financing. Given the previous answer, the correct calculation results in a duration gap of +1.12 years.

If the FI Finances a $500,000 2-Year Loan with a $400,000