The sensitivity of bank capital to market interest rates is measured by

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Duration analysis measures the sensitivity of bank capital to market interest rates by calculating the weighted average maturity of a bank's assets and liabilities. By comparing the duration of assets and liabilities, a bank can assess the potential impact that changes in interest rates could have on its capital position. Gap analysis measures the difference between a bank's interest rate sensitive assets and liabilities. The leverage ratio measures a bank's level of debt relative to its equity, while capital analysis focuses on evaluating a bank's capital adequacy and ability to absorb losses.

The Sensitivity of Bank Capital to Market Interest Rates Is