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Banks X and Y have very similar deposit/debt/stockholder's equity profiles. But their assets are dissimilar. The duration of Bank X's assets is much shorter than
Banks X and Y have very similar deposit/debt/stockholder's equity profiles. But their assets are dissimilar. The duration of Bank X's assets is much shorter than the duration of Bank Y's assets. So,
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a. Compared with Bank Y, Bank X's stockholders will benefit from lower market interest rates
b. Compared with Bank Y, Bank X's stockholders will benefit from higher market interest rates
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