The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB): U.S. Treasury bills $16 Demand deposits Mortgage-backed securities Loans from other banks C&I loans Discount loans $34 $33 $10 $54 $8 NOW accounts $35 Savings accounts $15 Reserve deposits with Federal Reserve $8 $9 $10 $3 Cash items in the process of collection Municipal bonds Bank building If RNB's assets have an average duration of five years and its liabilities have an average duration of four years, what is RNB's duration gap? Duration gap =

ENGR.ECONOMIC ANALYSIS
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The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB):
U.S. Treasury bills
$16
Demand deposits
Mortgage-backed securities
Loans from other banks
C&I loans
Discount loans
$34
$33
$10
$54
$8
NOW accounts
$35
Savings accounts
$15
Reserve deposits with Federal Reserve
$8
$9
$10
$3
Cash items in the process of collection
Municipal bonds
Bank building
If RNB's assets have an average duration of five years and its liabilities have an average duration of four years, what is RNB's duration gap?
Duration gap =
Transcribed Image Text:The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB): U.S. Treasury bills $16 Demand deposits Mortgage-backed securities Loans from other banks C&I loans Discount loans $34 $33 $10 $54 $8 NOW accounts $35 Savings accounts $15 Reserve deposits with Federal Reserve $8 $9 $10 $3 Cash items in the process of collection Municipal bonds Bank building If RNB's assets have an average duration of five years and its liabilities have an average duration of four years, what is RNB's duration gap? Duration gap =
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