Which of the following is false regarding
duration gap analysis?

Question

Answer

Duration
gap analysis indicates the potential change in a bank’s market value of equity.

Answer

Duration
gap accounts for bank leverage.

Answer

Duration
gap accounts for the present value of cash flows associated with all
liabilities.

Answer

Duration
gap analysis does not classify assets as rate-sensitive.

Answer

Duration
gap analysis indicates the potential change in a bank’s net interest income.

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