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Mercury Bank was mandated to provide medium to long term financing for the nation's nascent infrastructure, maritime, oil and gas and technology sectors. Based on
Mercury Bank was mandated to provide medium to long term financing for the nation's nascent infrastructure, maritime, oil and gas and technology sectors. Based on a recent report of condition, there is an average liability duration of 3.35 years and an average asset duration of 4.75 years for Mercury Bank. Its assets are RM1,029 million, while its liabilities are RM795 million in total. Assume that interest rates are 5% and then increase to 6%. Calculate the value of the net worth of the Bank dur to increase in interest rate.
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