The average duration of the loans is 10 years.The average duration of the deposits is 3 years.

\begin{array}{llr}\text { Consumer loans } & \$ 50 \text { million Deposits } & \$ 235 \text { million } \\\text { Commercial Loans } & \$ 200 \text { million Equity } & \$ 15 \text { million } \\\text { Total Assets } & \$ 250 \text { million Total Liabilities \& Equity } & \$ 250 \text { million }\end{array}

What is the change in the value of the FI's equity for a 1 percent increase in interest rates from the current rates of 10 percent? $The average duration of the loans is 10 years.The average duration of the deposits is 3 years. \begin{array}{llr} \text { Consumer loans } & \$ 50 \text { million Deposits } & \$ 235 \text { million } \\ \text { Commercial Loans } & \$ 200 \text { million Equity } & \$ 15 \text { million } \\ \text { Total Assets } & \$ 250 \text { million Total Liabilities \& Equity } & \$ 250 \text { million } \end{array} What is the change in the value of the FI's equity for a 1 percent increase in interest rates from the current rates of 10 percent? A)-$,979,091. B)-$16,318,182. C)-$15,979,091. D)+$16,318,182.$
A)-$,979,091.
B)-$16,318,182.
C)-$15,979,091.
D)+$16,318,182.

How Is a Hedge Ratio Commonly Determined

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