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Use the Following Bank Information for Questions -If Interest Rates Rise 1% for All Assets and Liabilities

question 37

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Use the following bank information for questions .
 Market  Value  Rate  Duration  (Years)   Liabilities  and  Equity  Market  Value  Rate  Duration  (Years)   Cash $150Time Deposits $5004%1.25 Loans $67510%2.50 CDs $4006%3.00 T-Bonds $1755%5.00 Equity $100 Total $1,000$1,000\begin{array}{|l|l|l|l|l|l|l|l|}\hline &\begin{array}{c}\text { Market } \\\text { Value }\end{array} &\text { Rate } & \begin{array}{c}\text { Duration } \\\text { (Years) }\end{array} & \begin{array}{c}\text { Liabilities }\\\text { and } \\\text { Equity }\end{array} & \begin{array}{c}\text { Market } \\\text { Value }\end{array} & \text { Rate } & \begin{array}{c}\text { Duration } \\\text { (Years) }\end{array} \\\hline\text { Cash } & \$ 150 & && \text {Time Deposits } & \$ 500 & 4 \% & 1.25 \\\hline \text { Loans } & \$ 675 & 10 \% & 2.50 &\text { CDs } & \$ 400 & 6 \% & 3.00 \\\hline\text { T-Bonds }&\$175&5\%&5.00&\text { Equity }&\$100&&\\\hline\text { Total }&\$1,000&&&&\$1,000\\\hline\end{array}
-If interest rates rise 1% for all assets and liabilities, what is the approximate expected change in the economic value of equity?

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity demanded by consumers, typically sloping downward from left to right.

Sales Price

The amount of money for which a product or service is sold to the customer.

Quantity Sold

The total number of units of a product or service sold during a specific period.

Market Forces

Natural economic factors that influence supply, demand, and prices within a marketplace, shaping business dynamics.

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