9-100 If All Interest Rates Fall by 1 Percent,calculate the Impact

question 31

Multiple Choice

9-100 If all interest rates fall by 1 percent,calculate the impact on the bank's market value of equity using the duration approximation.(That is, $\Delta$ R/(1+R) = -1 percent)

• A)The bank's market value of equity increases by $325,450.
• B)The bank's market value of equity decreases by $325,450.
• C)The bank's market value of equity increases by $336,500.
• D)The bank's market value of equity decreases by $336,500.
• E)There is no change in the bank's market value of equity.

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Definitions:

Intrinsic Ones

Internal factors or motivations that drive behavior or action, such as personal satisfaction or pleasure.

Change Competency

The ability to effectively manage and adapt to change within an organization or environment.

Nucor's Profit-Sharing Program

A compensation scheme implemented by the steel company Nucor, designed to share a portion of profits with employees, thereby aligning their interests with the success of the company.

Steel Produced

The quantity of steel that has been manufactured and processed from raw materials.