For a commercial bank, when the average duration of assets exceeds the average duration of liabilities, the duration gap is

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When the average duration of assets exceeds the average duration of liabilities, the bank is said to have a positive duration gap. This means that the bank's assets are more sensitive to changes in interest rates than its liabilities. A positive duration gap exposes the bank to interest rate risk, as a rise in interest rates would cause the value of its assets to decline more than the value of its liabilities.

For a Commercial Bank, When the Average Duration of Assets