Mutual Assurance Insurance Company has $782 million in total assets with an average duration of 5.47 years. It has total liabi (excluding common equity) of $696 million with an average duration of 8.13 years. If market interest rates are currently at 8%, would happen to the company if market interest rates changed to 10%? O The value of the company's equity would increase by just over $25 million. O The income of the company's assets would decrease by just over $2.556 million. O The value of the company's net worth would decrease by just over $25 million. O The income of the company would increase by just over $2.556 million. O The income of the company would increase by $25.2 million.

Mutual Assurance Insurance Company has $782 million in total assets with an average duration of 5.47 years. It has total liabi (excluding common equity) of $696 million with an average duration of 8.13 years. If market interest rates are currently at 8%, would happen to the company if market interest rates changed to 10%? O The value of the company's equity would increase by just over $25 million. O The income of the company's assets would decrease by just over $2.556 million. O The value of the company's net worth would decrease by just over $25 million. O The income of the company would increase by just over $2.556 million. O The income of the company would increase by $25.2 million.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 5P

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