11-49 The traditional duration equation can be used to measure the capital at risk on the loan.

Name: 11-49 The traditional duration equation can be used to measure the capital at risk on the loan.
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The traditional duration equation is a method to measure the sensitivity of an investment to changes in interest rates, but it can also be used to estimate the potential loss on a loan due to interest rate changes, and thus the capital at risk on the loan.

11-49 the Traditional Duration Equation Can Be Used to Measure