Tiger State Bank What New Asset Duration Will Immunize the Balance Sheet

question 63

Essay

Tiger State Bank
$\begin{array} { | l | l | l | } \hline \text { Assets } & \text { Duration } & \text { Market Value } \\\hline \text { Overnight Money } & 0.0 & £ 3 \text { Million } \\\hline \text { 1-year T-Bonds } & 0.6 & £ 8 \text { Million } \\\hline \text { Loans } & 2.20 & £ 20 \text { Million } \\\hline \text { Mortgages } & 7.50 & £ 8 \text { Million } \\\hline & & \\\hline \text { Liabilities } & \text { Duration } & \text { Market Value } \\\hline \text { Checking Accounts } & 0.0 & £ 20 \text { Million } \\\hline \text { Short-term CD's } & 0.4 & £ 4 \text { Million } \\\hline \text { Long-term CD's } & 3.20 & £ 12 \text { Million } \\\hline & & \\\hline \text { Equity } & & £ 3 \text { Million } \\\hline\end{array}$
What new asset duration will immunize the balance sheet?

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