The average duration of the loans is 10 years.The average duration of the deposits is 3 years. $\begin{array}{llr}
\text { Consumer loans } & \$ 50 \text { million Deposits } & \$ 235 \text { million } \
\text { Commercial Loans } & \$ 200 \text { million Equity } & \$ 15 \text { million } \
\text { Total Assets } & \$ 250 \text { million Total Liabilities \& Equity } & \$ 250 \text { million }
\end{array}$ What is the change in the value of the FI's equity for a 1 percent increase in interest rates from the current rates of 10 percent?
A)-$,979,091.
B)-$16,318,182.
C)-$15,979,091.
D)+$16,318,182.

Question

The average duration of the loans is 10 years.The average duration of the deposits is 3 years. $\begin{array}{llr}
\text { Consumer loans } & \$ 50 \text { million Deposits } & \$ 235 \text { million } \
\text { Commercial Loans } & \$ 200 \text { million Equity } & \$ 15 \text { million } \
\text { Total Assets } & \$ 250 \text { million Total Liabilities \& Equity } & \$ 250 \text { million }
\end{array}$ What is the change in the value of the FI's equity for a 1 percent increase in interest rates from the current rates of 10 percent?  
A)-$,979,091. 
B)-$16,318,182. 
C)-$15,979,091. 
D)+$16,318,182.

Quizplus · Accepted Answer

The Answer of The average duration of the loans is 10 years.The average duration of the deposits is 3 years. $\begin{array}{llr}
\text { Consumer loans } & \$ 50 \text { million Deposits } & \$ 235 \text { million } \
\text { Commercial Loans } & \$ 200 \text { million Equity } & \$ 15 \text { million } \
\text { Total Assets } & \$ 250 \text { million Total Liabilities \& Equity } & \$ 250 \text { million }
\end{array}$ What is the change in the value of the FI's equity for a 1 percent increase in interest rates from the current rates of 10 percent?  
A)-$,979,091. 
B)-$16,318,182. 
C)-$15,979,091. 
D)+$16,318,182.

The Average Duration of the Loans Is 10 Years What Is the Change in the Value of the FI's