What is the impact on economic capital of a 25 basis point decrease in interest rates if the FI is holding a 20-year,fixed-rate,11 percent annual coupon bond selling at a par value of $100,000?
A) A decrease of $250.
B) An increase of $250.
C) An increase of $2,024.
D) A decrease of $1,959.
Correct Answer:
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