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Consumer loans $150 Deposits $450 million million Commercial Loans $350 million Equity $50 million Total Assets $500 million Total Liabilities & Equity $500 million The
Consumer loans $150 Deposits $450 million million Commercial Loans $350 million Equity $50 million Total Assets $500 million Total Liabilities & Equity $500 million The average duration of the loans is 8 years. The average duration of the deposits is 3 years. Question: What is the change in the value of the Fl's equity for a 1 percent increase in interest rates from the current rates of 10 percent (i.e., AR = +0.01, and 1+R=1.10)? Consumer loans $150 Deposits $450 million million Commercial Loans $350 million Equity $50 million Total Assets $500 million Total Liabilities & Equity $500 million The average duration of the loans is 8 years. The average duration of the deposits is 3 years. Question: What is the change in the value of the Fl's equity for a 1 percent increase in interest rates from the current rates of 10 percent (i.e., AR = +0.01, and 1+R=1.10)
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