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b) Suppose that the Duration of Assets (DA) is 5 years and the duration of liabilities (DL) is 3 years. The current market value of
b) Suppose that the Duration of Assets (DA) is 5 years and the duration of liabilities (DL) is 3 years. The current market value of assets is 100 million pounds and the market value of liabilities is 80 million pounds. What would be the effect (loss or gain) on the market value of equity (dE) if interest rates increase from 5% p.a. to 7% p.a
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