Table 23.1 First National Bank

Multiple Choice

Table 23.1
First National Bank

-Refer to Table 23.1.Assuming that the average duration of its assets is five years,while the average duration of its liabilities is three years,a rise in interest rates from 5% to 10% will cause the net worth of First National to ________ by ________ of the total original asset value.

A) increase; 11%
B) decline; 11%
C) increase; 10%
D) decline; 5%