Question: The duration formula implies that if interest rates decrease, duration willincrease . The duration gap formula implies that, ceteris paribus, the gap will remain the

The duration formulaimplies that if interest rates decrease, duration willincrease . The duration gap formulaimplies that, ceteris paribus, the gap will remain the same, if the interest rate change affects the value of the bank's assetsin the same way as than it affects the value of its liabilities.

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