Duration Bank Has the Following Assets and Liabilities as of Year-End

question 54

Multiple Choice

Duration Bank has the following assets and liabilities as of year-end. All assets and liabilities are currently priced at par and pay interest annually. What is the change in the value of its liabilities if all interest rates decrease by 1 percent?

• A)Approximately $2.003 million.
• B)Approximately -$2.355 million.
• C)Approximately $2.697 million.
• D)Approximately $2.906 million.
• E)Approximately $3.211 million.

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Definitions:

Neuromodulator

A type of chemical messenger released from neurons in the brain to signal other neurons, modifying their activities and influencing many bodily functions.

Synaptic Cleft

The small gap at the synapse between neurons, through which neurotransmitters are sent to communicate signals.

Androgens

A group of hormones that play a role in male traits and reproductive activity; present in both males and females.

Feminizing Hormones

Hormones, such as estrogen, that promote the development of female secondary sexual characteristics.