The balance sheet of Capital Bank appears as follows: Assets Liabilities and Maturities Short Term Securities...

 

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The balance sheet of Capital Bank appears as follows: Assets Liabilities and Maturities Short Term Securities and Adjustable Rate Loans $220 Short Term and Floating Rate Funds $560 Duration: 6 months Duration 6 months Fixed-Rate Funds Duration: 30 months. 270 170 $1000 Fixed-Rate Loans Duration: 8 years. Nonearning Assets Total Assets Required: interest rates increased by 1 percent. 700 80 $1000 Calculate the duration gap of this bank, Assuming that the required rate of return is 8 percent, what would be the effect on the bank's net worth if Equity Total Liabilities and Net Worth management take to reduce this change? Suppose that the expected change in net worth is unacceptable to management. What outcome could The balance sheet of Capital Bank appears as follows: Assets Liabilities and Maturities Short Term Securities and Adjustable Rate Loans $220 Short Term and Floating Rate Funds $560 Duration: 6 months Duration 6 months Fixed-Rate Funds Duration: 30 months. 270 170 $1000 Fixed-Rate Loans Duration: 8 years. Nonearning Assets Total Assets Required: interest rates increased by 1 percent. 700 80 $1000 Calculate the duration gap of this bank, Assuming that the required rate of return is 8 percent, what would be the effect on the bank's net worth if Equity Total Liabilities and Net Worth management take to reduce this change? Suppose that the expected change in net worth is unacceptable to management. What outcome could

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a Duration Gap 6 months 560 8 years 700 30 months 270 1000 6 months 3360 56... View the full answer