$55$

Multiple Choice

$1\mathrm{.}5$ points

A bank has an average duration of its liabilities equal to $2$ years. The bank's average duration of its assets is $3\mathrm{.}5$ years. The bank's market value of equity is at risk if

$q,$

credit spreads fall

interest rates rise

interest rates fall

the price of all fixed$-$income securities rises

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