Table 23.2 First National Bank

question 51

Multiple Choice

Table 23.2
First National Bank

-Refer to Table 23.2.Assuming that the average duration of the bank's assets is four years,while the average duration of its liabilities is three years,a rise in interest rates from 5 percent to 10 percent will cause the net worth of First National to ________ by ________ of the total original asset value.

• A) decline; 5%
• B) decline; 1.3%
• C) decline; 6.2%
• D) increase; 5%

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Definitions:

Financial Bottom Line

A reference to the net income, profit, or loss reported at the bottom of a company's income statement.

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