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A savings banks weighted average asset duration is 7 years. Its total liabilities amount to $900 million, while its assets total $1 billion. What is

  1. A savings banks weighted average asset duration is 7 years. Its total liabilities amount to $900 million, while its assets total $1 billion.
    1. What is the dollar-weighted duration of the banks liability portfolio if it has zero leverage adjusted duration gap?
    2. Does zero duration gap mean the bank has hedged the interest rate risk perfectly? Comment on it by referring to the problems with duration.

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