Which of the following conditions may result as a complication of edematous bowel?

Duration increases with the maturity of the asset.

Please use the following additional information for Questions 34-37: Suppose there are three bond ratings: A, B, C and default (D). The ratings-migration probabilities over the next year look like this for a B-rated, 3-year, 4% annual-coupon bond ($100 par value) loan: Rating in 1 year          Probability A                                 0.03 B                                 0.92 C                                 0.03 Default                        0.02 The yield on A rated bonds is 5%; the yield on B rated bonds is 6%; and the yield on a C rated bond is 9%. All term structures are flat (i.e. forward rates equal spot rates). Assume that in default you recover 50% at the time of default. Question: What is the 2% VAR?

A bank has Tier 1 capital of $90 million and Tier 2 capital of $70 million. The bank has total assets of $2,522 million and risk-weighted assets of 2,017.6 million. This bank is 

The maturity structure of the assets of regional commercial banks tends to be shorter than the maturity structure of liabilities.

Assume that the face values of the following bonds are the same. Rank them in terms of how much of the value they would lose if interest rates rose: (Rank 1 is for the one that loses the most value, 3 is for the one that loses the least value) (1 point for each accurate ranking!) a. A 30-year Treasury bond with an annual coupon and interest rate of 6% b. A 30-year Treasury bond with an annual coupon of 6% and interest rate of 7% c. A 5-year Treasury bond with an annual coupon of 6% trading at par a,b,c ranked as:

Please use the following additional information for Questions 42-43: First Duration, a securities dealer, has a leverage-adjusted duration gap of 1.21 years, $60 million in assets, 7 percent equity to assets ratio, and market rates are 8 percent. Question: What is the impact on the dealer’s market value of equity if the change in all interest rates is an increase of 0.5 percent?

Moral hazard encourages the FI to take less, rather than more, risk. 

If the average maturity of assets is 5 years and the average maturity of liabilities is 7 years, then the FI has no interest rate risk exposure. 

Duration is the weighted-average present value of the cash flows using the timing of the cash flows as weights.