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Discussion 3 Advanced Gap analysis: Attempt it only after reviewing week 9 & 10 lectures & notes
(1) Does the income gap have the same sign as the duration gap in the case of the First National Bank, or are they the opposite? .
(2) How about the Friendly Finance Company?
(3) How do you explain this phenomenon, in one sentence?
Discussion 3 Advanced Gap analysis: Attempt it only after reviewing week 9 & 10 lectures & notes Answer
- Yes, both income gap and duration gap have the same sign.
- Income gap and duration gap have opposite sign.