For a Bank That Has a Positive Duration Gap, a Decrease

For a bank that has a positive duration gap, an increase in interest rates will cause a(n) _______ in the economic value of assets, a(n) _______ in the economic value of liabilities, and a(n) _______ in the economic value of equity. A)increase, decrease, increase B)increase, increase, decrease C)increase, increase, increase D)decrease, decrease, increase E)decrease, decrease, decrease

To perfectly immunize a bank's economic value of equity from changes in interest rate risk, it should: A)adjust assets and liabilities such that its duration gap is equal to one. B)adjust assets and liabilities such that its duration gap is greater than zero. C)adjust assets and liabilities such that its duration gap is equal to zero. D)adjust assets and liabilities such that its GAP is equal to zero. E)adjust assets and liabilities such that its GAP is less than one.