Duration analysis is an alternative to gap analysis for measuring interest-rate risk. The duration of an asset or liability measures how sensitive its market value is to a change in the interest rate: the more sensitive, the longer the duration. In Chapter 6, you saw that the longer the term of a bond, the larger the price change for a given change in the interest rate.
Using this information and the knowledge that interest rates increases tend to hurt banks, would you say that the average duration of a bank’s assets is longer or shorter than that of its liabilities?