-Calculate the Duration of Tiger State Bank's Assets and Liabilities

question 57

Essay

$\begin{array} { l l l } \text { Assets } & \text { Duration } & \text { Market Value } \\\text { Overnight Money } & 0.0 & \text { \$3 Million } \\\text { 1-year T-Bonds } & 0.6 & \$ 8 \text { Million } \\\text { Loans } & 2.20 & \$ 20 \text { Million } \\\text { Mortgages } & 7.50 & \$ 8 \text { Million } \\\text { Liabilities } & \text { Duration } & \text { Market Value } \\\text { Checking Accounts } & 0.0 & \$ 20 \text { Million } \\\text { Short-term CD's } & 0.4 & \$ 4 \text { Million } \\\text { Long-term CD's } & 3.20 & \$ 12 \text { Million } \\\text { Equity } & &\text { \$3 Million } \\\end{array}$
-Calculate the duration of Tiger State Bank's assets and liabilities.

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Definitions:

Behavioral Economists

Specialists in economics focusing on how psychological, emotional, cultural, and social factors influence the economic decisions of individuals and institutions.

Realized Losses

Losses that occur when an asset is sold for less than its purchase price, thereby converting a theoretical loss into an actual loss.

Aversion

A strong dislike or disinclination towards something, often used in economics in the context of risk aversion.

Overconfidence

The bias in which someone's subjective confidence in their judgements is greater than their objective accuracy.