If the Loan Portfolio Consists of a Five-Year,10 Percent Annual

Multiple Choice

$\begin{array}{lccc} \text { Securities (at par) } & \text { \$ 250 Deposits}& \$975 \\ \text { Loans (at par) } & \text { \$ 760 Capital} & \$ 35\end{array}$
If the loan portfolio consists of a five-year,10 percent annual coupon loan selling at par,what is the market,or economic,value of capital if interest rates increase 1 percent?

A) $35 million.
B) -$155 million.
C) $7 million.
D) -$7 million.