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Refer to Table 1. Assuming that the average duration of the bank's assets is four years, while the average duration of its liabilities is three

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Refer to Table 1. Assuming that the average duration of the bank's assets is four years, while the average duration of its liabilities is three years, a rise in interest rates from 5 percent to 10 percent will cause the net worth of First National to _________ by _________ of the total original asset value. A) decline; 5% B) decline; 1.3% C) decline; 6.2% D) increase; 5%

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First National Bank Liabilities ifive $40 million $50 million Fixed-rate $60 million $40million Assets

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