20-82 from a Regulatory Perspective,what Is the Impact on Book

question 140

Multiple Choice

20-82 From a regulatory perspective,what is the impact on book value capital of a 25 basis point decrease in interest rates if the FI is holding a 20-year,fixed-rate,11 percent annual coupon $100,000 par value bond?

• A)A decrease of $250.
• B)An increase of $250.
• C)An increase of $2,023.
• D)A decrease of $1,959.
• E)No impact on capital since the book value is unchanged.