The average duration of the loans in a Bank is 8 years. The average duration of the deposits is 4.5 years. Total assets value is $250 million, including consumer loans of value $50 million and commercial loans of value $200 million. The liability of the bank consists of Deposits of value $230 million. The equity value is $20 million.

What is the change in the value of the banks equity for a 1 percent decrease in interest rates from the current rates of 10 percent?

a.

-$9,635,635.64

b.

+$9,635,635.64

c.

+$9,678.678.68

d.

+$8,772,727.27

e.

-$8,772,727.27