This is an easy one, fortunately. The definition of LADG is: \[LADG\ =\ Dur_{Assets}\ -\ \frac{L}{A}Dur_{Liabilities}\] where: \(Dur_{Assets}\): (effective) duration of assets \(Dur_{Liabilities}\): (effective) duration of liabilities \(L\): market value of liabilities \(A\): market value of assets If we multiply both sides of this equation by A, we get: \begin{align}\left(A\right)LADG\ &=\ \left(A\right)Dur_{Assets}\ -\ \left(L\right)Dur_{Liabilities}\\ \\ […]
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