Assume a bank has $200 million of assets with a duration of 2.5,and $190 million of liabilities with a duration of 1.05. If interest rates increase from 5 percent to 6 percent,the net worth of the bank falls by
A)$1 million.
B)$2.4 million.
C)$3.6 million.
D)$4.8 million.

Question

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The Answer of Assume a bank has $200 million of assets with a duration of 2.5,and $190 million of liabilities with a duration of 1.05. If interest rates increase from 5 percent to 6 percent,the net worth of the bank falls by
A)$1 million.
B)$2.4 million.
C)$3.6 million.
D)$4.8 million.

Assume a Bank Has $200 Million of Assets with a Duration