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USE EXCEL A bank has an average asset duration of 2.25 years, the average duration of the liabilities is 1.25 years, and the bank has

USE EXCEL

A bank has an average asset duration of 2.25 years, the average duration of the liabilities is 1.25 years, and the bank has total assets of $2 billion and $200 million in equity. The bank has a ROE of 9.00 percent.

If all interest rates decrease 50 basis points, find the predicted change in the bank's market value of equity (in percentage terms).

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