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Question One: (5 Marks) XYZ firm has a duration of assets = 5 years, duration of liabilities = 3 years, interest rate = 10%, total

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Question One: (5 Marks) XYZ firm has a duration of assets = 5 years, duration of liabilities = 3 years, interest rate = 10%, total assets = 200 and total liabilities = 180. By considering 1% change in interest rate, then, (1): find the market value of assets. (2) find the market value of liabilities. (3) what would be the change in equity, given the change in interest rate provided

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