Question
Assuming that the average duration of its assets is five years, while the average duration of its liabilities is three years, then a 5 percentage
Assuming that the average duration of its assets is five years, while the average duration of its liabilities is three years, then a 5 percentage point increase in interest rates will cause the net worth of First National to decline by __________ of the total original asset value.
A) 5 percent
B) 10 percent
C) 15 percent
D) 25 percent
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Economics
Authors: R. Glenn Hubbard
6th edition
978-0134797731, 134797736, 978-0134106243
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