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AMR Finance has assets of $50,000, equity of $5,000 and a leverage-adjusted duration gap (DGAP) of -2.50 years. Current interest rates are 3%, What level
AMR Finance has assets of $50,000, equity of $5,000 and a leverage-adjusted duration gap (DGAP) of -2.50 years. Current interest rates are 3%, What level of interest rate change (R) would wipe away AMR's equity capital?
A. + 4.12%
B. - 4.12%
C. + 2.5%
D. None of the above.
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