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You calculate that the duration of your assets of your bank is 5.6 years and the...

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Finance

You calculate that the duration of your assets of your bank is5.6 years and the duration of your liabilities is 4.2 years. Youcurrently have $70 million in liabilities and $5 million in equity.The interest rate is currently 4%. Calculate the change in networth if interest rates decrease by 20 basis points.

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Transcribed Image Text

You calculate that the duration of your assets of your bank is5.6 years and the duration of your liabilities is 4.2 years. Youcurrently have $70 million in liabilities and $5 million in equity.The interest rate is currently 4%. Calculate the change in networth if interest rates decrease by 20 basis points.

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