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%

---

Definitions:

Null Hypothesis

A hypothesis in statistical tests that assumes no effect or no difference between groups or conditions being compared.

Consecutive Weeks

A succession of weeks that occur consecutively without any breaks.

Confidence Interval

A variety of values, based on statistics from a sample, which is conjectured to envelop an obscure population parameter.

P-value

A statistical concept indicating the probability of observing data as extreme as those seen, if the null hypothesis were true, used in hypothesis testing.