The Average Duration of the Loans Is 10 Years What Is the Cash Spread Earned by the FI If

Multiple Choice

The average duration of the loans is 10 years.The average duration of the deposits is 3 years. $$\begin{array} { | l | r | l | r | } \hline \text { Consumer loans } & \$ 50 \text { million } & \text { Deposits } & \$ 235 \text { million } \\\hline \text { Commercial Loans } & \$ 200 \text { million } & \text { Equity } & \$ 15 \text { million } \\\hline \text { Total Assets } & \$ 250 \text { million } & \text { Total Liabilities \& Equity } & \$ 250 \text { million } \\\hline\end{array}$$ What is the cash spread earned by the FI if at the end of the year the ? is trading at $1.63/? in the cash market? Again adjust for all exchange rate changes.

A) $1,610,000 gain.
B) $1,610,000 loss.
C) $2,670,000 loss.
D) $2,670,000 gain.
E) $2,390,000 loss.