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a. If the duration of assets is 1.16 and duration of liabilities is 2.77, how much change in net worth will take place because of

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a. If the duration of assets is 1.16 and duration of liabilities is 2.77, how much change in net worth will take place because of a fall in interest rate from 10% to 5%? Assume the assets equal to $100m and liabilities equal to $90m. b. Why would a bank decline a loan even if the borrower is willing to pay a high interest rate

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