The duration gap is calculated by subtracting the duration of the liabilities from the duration of the activity of the financial entities. Thus, in this case, the net worth of 1.8 percent of its assets.
<h3>What do you mean by Duration Gap?</h3>
Duration Gap refers to the term used by funds, banks, pensions, or many financial institutions to estimate the risk because of changed interest rates.
Also, if we have a negative duration gap means that the market value of equity will increase when interest rates rise.
Thus, in this case, If interest rates increase from 9 percent to 10 percent, a bank with a duration gap of 2 years would experience a decrease in its net worth of 1.8 percent of its assets.
Learn more about Duration gap here:
brainly.com/question/7276068
#SPJ1
A is the primary determinant of consumption and is usually measured in terms of current disposable income .
Answer:
e. learning curve
Explanation:
The learning curve is the curve which shows the progress of an individual with respect to his or her learning i.e how much quickly someone learns. It shows the graph of an individual in terms of new skills, qualities of performing a task
Since in the given scenario, the Lauro estimated that the proposed time would took 10% less time and money which reflects the learning curve of her
Answer:
$71,428.57
Explanation:
we can use the perpetuity formula to solve this question:
present value = future cash flow / (discount rate - g)
- future cash flow = $10,000
- discount rate = 6%
- g = growth rate = -8%
present value = $10,000 / (6% - - 8%) = $10,000 / 14% = $71,428.57
