Given the estimates of duration in Table, what will happen to the banks net worth if interest
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Duration of the First National Banks Assets and Liabilities Amount Dron Weighted IS millions) (years Duration years Reserves and cash items 0.0 0.00 Less than 1 year 1 to 2 years Greater than 2 years 0.02 0.08 0.70 0.4 10 7.0 Residential mortgages Variable rate 10 10 0.5 6.0 0.05 0.60 Fixed rate (30-yearl) Commercial loans Less than 1 year 1 to 2 years Greater than 2 years 0.7 15 10 25 0.11 0.14 1.00 0.00 Physical capital 0.0 Averoge duration Checkable deposits Money market deposit accounts Savings deposits 2.0 0.32 0.01 0.16 15 15 Variable rate Less than 1 year 1 to 2 years Greater than 2 years 0.5 10 15 0.05 0.03 0.06 1.2 2.7 0.0 Fed funds 0.00 Less than 1 year 1 to 2 years Greater than 2 years Average duration 10 0.3 0.03 0.07 0.16 1.03
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Related Book For
Financial Markets And Institutions
ISBN: 978-0132136839
7th Edition
Authors: Frederic S. Mishkin, Stanley G. Eakins
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