Use the Following Table to Answer the Question

question 67

Multiple Choice

Use the following table to answer the question :

-Assuming that the average duration of its assets is five years,while the average duration of its liabilities is three years,then a 5 percentage point increase in interest rates will cause the net worth of First National to decline by ________ of the total original asset value.

• A)5 percent
• B)10 percent
• C)15 percent
• D)25 percent

---

Definitions:

Antiassignment Clauses

Provisions within contracts that restrict or prohibit the transfer of contract rights to another party.

Enforceable

Able to be enforced or maintained through legal proceedings.

American Rule

A legal principle stating that each party involved in a lawsuit should pay their own attorney's fees, except under specific circumstances where a statute or contract allows for the award of fees.

Assignee

A person or entity to whom rights or interests have been transferred by another, known as the assignor.