FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Suppose that you are the manager of a bank whose $100 billion of assets have an average duration of four years and whose $90 billion of liabilities have an average duration of six years Conduct a
duration analysis for the bank, and show what will happen to the net worth of the bank if interest rates rise by 2 percentage points.
Assets fall in value by $ billion. (Round your response to the nearest whole number)
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Transcribed Image Text:K Suppose that you are the manager of a bank whose $100 billion of assets have an average duration of four years and whose $90 billion of liabilities have an average duration of six years Conduct a duration analysis for the bank, and show what will happen to the net worth of the bank if interest rates rise by 2 percentage points. Assets fall in value by $ billion. (Round your response to the nearest whole number)
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