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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