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The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB) $25 U.S. Treasury bills Demand deposits $46 $26
The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB) $25 U.S. Treasury bills Demand deposits $46 $26 Mortgage-backed securities $6 Loans from other banks $51 C&I loans $6 Discount loans $40 NOW accounts t Savings accounts Reserve deposits with Federal Reserve Cash items in the process of collection $12 $6 $10 Municipal bonds Bank building $8 $4 If RNB's assets have an average duration of five years and its liabilities have an average duration of three years, what is RNB's durason gap? Duration gap
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