Assume that the Friendly Finance Company initially has the balance sheet shown on page 607 and that

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Assume that the Friendly Finance Company initially has the balance sheet shown on page 607 and that interest rates are initially at 8%.

Cash and deposits Securities Assets Less than 1 year 1 to 2 years Greater than 2 years Consumer loans Less


If the manager of the Friendly Finance Company revises the estimates of the duration of the company's assets to two years and liabilities to four years, what is the effect on net worth if interest rates rise by 3 percentage points?

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Financial Markets And Institutions

ISBN: 9781292215006

9th Global Edition

Authors: Stanley Eakins Frederic Mishkin

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