Tiger State Bank What New Asset Duration Will Immunize the Balance Sheet

question 41

Essay

Tiger State Bank
$\begin{array}{|l|l|l|}\hline \text { Assets } & \text { Duration } & \text { Market Value } \\\hline \text { Overnight Money } & 0.0 & £ 3 \text { Million } \\\hline \text { 1-year T-Bonds } & 0.6 & £ 8 \text { Million } \\\hline \text { Loans } & 2.20 & £ 20 \text { Million } \\\hline \text { Mortgages } & 7.50 & £ 8 \text { Million } \\\hline & & \\\hline \text { Liabilities } & \text { Duration } & \text { Market Value } \\\hline \text { Checking Accounts } & 0.0 & £ 20 \text { Million } \\\hline \text { Short-term CD's } & 0.4 & £ 4 \text { Milion } \\\hline \text { Longterm CD's } & 3.20 & £ 12 \text { Million } \\\hline & & \\\hline \text {Equity}& & £ 3 \text { Million }\\\hline\end{array}$ What new asset duration will immunize the balance sheet?

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Definitions:

Increases

Refers to a process or action resulting in a greater amount, number, or degree of something.

Constant

A situation or value that does not change or vary, often used in the context of scientific experiments or mathematical equations.

REM Sleep

REM sleep, or Rapid Eye Movement sleep, is a phase of sleep characterized by fast eye movements, vivid dreams, and increased brain activity.

N1 Sleep

The initial stage of non-REM sleep characterized by light sleep, from which a person can be easily awakened.