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The manager for Tyler Bank and Trust has the following assets to manage: Asset Value Duration (in years) Liability Value Duration (in years) Bonds 75,000,000
The manager for Tyler Bank and Trust has the following assets to manage: Asset Value Duration (in years) Liability Value Duration (in years) Bonds 75,000,000 9.00 Demand Deposits 300,000,000 1.00 Consumer Loans 875,000,000 2.00 Saving Accounts 1,347,000,000 0.50 Commercial Loans 700,000,000 5.00 Compute the duration gap. (5 marks) c) Will you use junk bonds in your portfolio? Why? Why not? Make your case briefly with suitable arguments. (50 words
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