Question: A) what are major differences between repricing model and maturity gap model for measuring interest rate risk for a financial depository institution? B) GIven the

A) what are major differences between repricing model and maturity gap model for measuring interest rate risk for a financial depository institution?

B) GIven the following Information:

R1 = 6%

E(2r1) = 7 %

E(3r1) = 7.5 %

Using unbiased exepectation theory, calculate the current spot rate for 1R3

C) Suppose we have three year Eurobond with 8% coupons yearly and 8% yield to maturity, calculate the duration of the bond.

Please show your work and throughly explain how you reached the answers. Thank you.

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