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  3. if a bank has a duration gap of 40 years, and inte

if a bank has a duration gap of 40 years, and interest rates increase from...

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Accounting

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if a bank has a duration gap of 40 years, and interest rates increase from 6% to 8%, whit is the change in the dolle value of equity (assume that sets are $1 billion)? O Credin derivatives do not protect against credit risk exposure O Regulators may decide to lower the amount of capital needed for banks using these derivatives The partner in the swap or option contract may fail to perform O Regulators may decide that these derivatives make the bank more stable and efficient All of the above are risks of using credit derivatives

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