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Economics

Suppose First National Bank holds $100 million in assets with an average duration of 4 years, and it holds $85 million in liabilities with an average duration of 3 years. Further suppose there is a 2-percentage-point increase in interest rates. Calculate the percentage decrease in First National Bank's net worth relative to the total original asset value

A 2-percentage-point increase in interest rates decreases First National Bank's net worth by ----- % of the total original asset value. (Round your response to two decimal places.)

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91924772

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