A financial institution has equity equal to one-tenth of its assets. If its asset duration is currently

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A financial institution has equity equal to one-tenth of its assets. If its asset duration is currently equal to its liability duration, then to immunize, the firm needs to:

increase the duration of its assets.

decrease the duration of its assets.

decrease the duration of its liabilities.

do nothing, i.e., keep the duration of its liabilities equal to the duration of its assets.

Related Book For answer-question

Fundamentals of Futures and Options Markets

ISBN: 978-0132993340

8th edition

Authors: John C. Hull

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Posted Date: Mar 20, 2019 09:48 AM

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A financial institution has equity equal to one-tenth of its assets. If its asset duration is currently

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Fundamentals of Futures and Options Markets

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