Assuming that the average duration of its assets is five years, while the average duration of its liabilities is three years, then a 5 percentage point increase in interest rates will cause the net worth of First National to decline by __________ of the total original asset value.

A) 5 percent
B) 10 percent
C) 15 percent
D) 25 percent

Answer rating: 100% (QA)

The answer is decline 5 Assuming that the average durati... View the full answer