Solved

What Is the Effect of a 100 Basis Point Increase

Question 86

Multiple Choice

What is the effect of a 100 basis point increase in interest rates on the market value of equity of the FI? Use the duration approximation relationship. Assume r = 4 percent.


A) -27.56 million.
B) -28.01 million.
C) -29.85 million.
D) -31.06 million.
E) -33.76 million.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q10: Duration increases with the maturity of a

Q14: Calculating modified duration involves<br>A)dividing the value of

Q23: Perfect matching of the maturities of the

Q26: The economic meaning of duration is the

Q76: For a given maturity fixed-income asset, duration

Q82: First Duration Bank has the following

Q83: Which of the following is indicated by

Q89: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB2401/.jpg" alt=" -What is this

Q90: <span class="ql-formula" data-value="D = \frac { \left[

Q97: Setting the duration of the assets higher