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

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 five-year,10 percent annual coupon par value loans,what is the market,or economic,value of capital if interest rates decrease 2 percent?

A) $35 million.
B) $96 million.
C) $60 million.
D) -$7 million.