What Is the Effect of a 100 Basis Point Increase

question 85

Multiple Choice

What is the effect of a 100 basis point increase in interest rates on the market value of equity of the FI? Use the duration approximation relationship.Assume r = 4 percent.

• A)-27.56 million.
• B)-28.01 million.
• C)-29.85 million.
• D)-31.06 million.

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Definitions:

Id

The part of the mind in psychoanalytic theory responsible for instinctual impulses and demands for immediate satisfaction.

Executive Personality

A term referring to personality traits associated with effective leadership and management, such as decisiveness, problem-solving abilities, and the capacity to motivate others.

Gratification

The satisfaction or pleasure felt when a desire, need, or expectation is fulfilled.

Ego

In psychoanalytic theory, the part of the personality that mediates between the demands of the id, the superego, and reality.