Pillow Private Bank has the following market value balance sheet: (a) What is the duration of the
Question:
Pillow Private Bank has the following market value balance sheet:
(a) What is the duration of the assets?
(b) What is the duration of the liabilities?
(c) Is the bank immune from interest rate risk?
Transcribed Image Text:
Asset or Liability Government deposits Trade receivables Short-term loans Long-term loans Mortgages Liabilities Chequing and savings deposits Certificates of deposit Long-term financing Equity Market Value (in billions) 28 580 390 84 315 520 340 260 277 Duration (in years) 0 1.20 2.65 7.25 16.25 0 2.60 17.80 N/A
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Related Book For
Corporate Finance
ISBN: 9780077173630
3rd Edition
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
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