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

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Definitions:

Credit Card

A payment card issued to users as a method of payment allowing the cardholder to pay for goods and services based on the holder's promise to pay for them.

Sequential Game

A sequential game is a type of game theory model where players make decisions one after another, rather than simultaneously, allowing for the observation of previous choices.

Nash Equilibria

An idea in game theory in which no participant can benefit by altering their approach if all other participants maintain their strategies.

Dominant Strategy

A Dominant Strategy is a game theory concept where a player's best course of action remains unchanged regardless of what the opponent does.