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You are assessing the interest rate risk of following balance sheet. Assets Liabilities A = $100 m L = $90 m E = $10 m

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You are assessing the interest rate risk of following balance sheet. Assets Liabilities A = $100 m L = $90 m E = $10 m Assume that the average duration of assets is 5 years, while the average duration of liabilities is 3 years. What is the change to the banks' equity, in millions, if interest rates were decreasing from 10% to 9%? 2.09 -2.09 -1.91 1.91

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