PLEASE ITS URGENT, PLEASE ITS URGENT

The balance sheet of an FI looks like

Asset Side

• $75 million of Cash
• $750 million of Loans earning 12% per year and having a duration of 1.75 years
• $175 million of Treasuries earning 9% per year and having a duration of 7 years

Liability Side

• $350 million of Time Deposits paying 7% per year and having a duration of 1.75 years
• $575 million of CDs paying 8% per year and having a duration of 2.50 years
• $75 million of Equity

If all interest rates decline 90 basis points (R/(1 + R) = 90 basis points), what is the new capital to asset ratio?

A. 0.078

B. 0.925

C. 0.075

D. 0.851

E. 0.071