1. Which of the following about maturity gap is true?
   1. It can be used for forecasting the change in market value of equity
   2. It takes into account the schedule of the cash flows of an asset ot a liability
   3. It focuses only on the changes in net interest income resulting from the changes in interest rates
   4. It takes into account the time value of money

2. Suppose the bank has a negative maturity gap of 2 years. If interest rates increase by 2 percentage points, the market value of equity will
   1. Increase because of the exposure to reinvestment risk
   2. Decrease because of the exposure to reinvestment risk
   3. Increase because of the exposure to refinancing risk
   4. Decrease because of the exposure to refinancing risk

3. Maturity gap is
   1. The difference between the size of assets and liabilities
   2. The difference between rate-sensitive assets and rate-sensitive liabilities
   3. The difference between duration of assets and duration of liabilities
   4. None of the above
4. Refer to the following balance sheet information:

5. Assets	amount, $ mln	Liabilities	amount, $ mln
   Cash	10	Deposits	50
   T-bills	20	CDs	20
   Loans	50	Equity	10
   	80		80

   Calculate the average maturity of assets and liabilities. (2 points)