Table 23.2 First National Bank

Multiple Choice

Table 23.2
First National Bank

-Refer to Table 23.2.Assuming that the average duration of the bank's assets is four years,while the average duration of its liabilities is three years,a rise in interest rates from 5 percent to 10 percent will cause the net worth of First National to ________ by ________ of the total original asset value.

A) decline; 5%
B) decline; 1.3%
C) decline; 6.2%
D) increase; 5%