Which of the following statements about leverage-adjusted duration gap is TRUE?

Select one:

A. The smaller the gap in absolute terms, the more exposed the Fl is to interest rate

shocks.

B. Its value is equal to duration divided by (1 + R).

C. It indicates the dollar size of the potential net worth.

D. It is equal to the duration of the assets minus the duration of the liabilities.

E. It reflects the degree of duration mismatch in an Fl's balance sheet.