# Calculate Leverage Adjusted Gap Between Assets and Liabilities And Loan Amortization

Question

1. An FI has financial assets of \$800 and equity of \$50. If the duration of assets is 1.21 years and the duration of all liabilities is 0.25 years, what is the leverage-adjusted duration gap?
a.    0.9000 years.
b.    0.9600 years.
c.    0.9756 years.
d.    0.8844 years.
e.    Cannot be determined.

2. Calculate the duration of a two-year corporate loan paying 6 percent interest annually, selling at par. The \$30,000,000 loan is 100 percent amortizing.
a.    2 years.
b.    1.89 years.
c.    1.94 years.
d.    1.49 years.
e.    1.73 years.

3. Calculate the modified duration of a two-year corporate loan paying 6 percent interest annually. The \$40,000,000 loan is 100 percent amortizing, and the current yield is 9 percent annually.
a.    2 years.
b.    1.91 years.
c.    1.94 years.
d.    1.49 years.
e.    1.36 years.

Summary

These short questions belong to Finance. The 1st question is about leverage adjusted duration gap between assets and liabilities and 2nd and 3rd questions are about 100% loan amortization.

Total Word Count 99

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