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b . Suppose the bank total asset is GH 1 0 Millions, its duration is 6 years and the Green bond represent the total liabilities
b Suppose the bank total asset is GHMillions, its duration is years and the Green
bond represent the total liabilities of the bank while the capitalization shows the
equity position of the bank. Take the duration of the liability as determined in iii
and the changes in interest rate as stated in v
i Determine the norminal change in the equity position of the bank as a result
of an increase in interest rates?
ii What is the percentage gainloss in the equity position of the bank?
iii. Based on your answers in i and ii should the bank shareholders increase
or decrease their equity position? Is the bank a strong bank or weak bank?
iv Suppose assets of the bank rise by and liabilities decrease by What
advise will you have for management of the bank regarding managing the
assets and liabilities of this bank?
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