A bank has D_A = 2.5 years, D_L= 0.80 years, and k = 92%. Assets are equal to $1,200 million. According to the duration gap model, what size interest rate change would make the institution insolvent if rates are currently 5%?

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The Answer of A bank has D_A = 2.5 years, D_L= 0.80 years, and k = 92%. Assets are equal to $1,200 million. According to the duration gap model, what size interest rate change would make the institution insolvent if rates are currently 5%?

A Bank Has DA = 2

A Bank Has D_A = 2