Table 23.1 First National Bank

question 54

Multiple Choice

Table 23.1
First National Bank

-Refer to Table 23.1.Assuming that the average duration of its assets is five years,while the average duration of its liabilities is three years,a rise in interest rates from 5% to 10% will cause the net worth of First National to ________ by ________ of the total original asset value.

• A) increase; 11%
• B) decline; 11%
• C) increase; 10%
• D) decline; 5%

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Definitions:

Units Produced

The total quantity of products manufactured by a company during a specific period.

Total Variable Cost

The sum of expenses that vary directly with the level of production or sales volume; these costs increase as production increases and decrease as production decreases.

Units Sold

The total quantity of product items that a company has sold to consumers during a certain period.

Indirect Manufacturing Cost

Costs in the production process that are not directly tied to the physical production of goods, such as maintenance and utilities.