1.

Question 1 options:

1)

-$95.73

2)

$55.35

3)

-$46.12

4)

$66.42

5)

$79.86

Calculate the change in the bank's economic value of equity if interest rates are expected to decline by 0.5% Assets Market Value Rate Duration Liabilities Market Value Rate Duration Cash $1,500 Small time $2,000 2.5% 1 deposits Large CDs T-bond $6,000 6.0% 2.5 $8,000 4.0% 2 Comm. Loan $8,000 8.0% 4 Transaction $4,000 2.0% 3 Accounts Total Assets $15,500 Total Liabilities $14,000 2.88 Equity (EVE) $1,500 Total Liabilities $15,500 and Equity Calculate the change in the bank's economic value of equity if interest rates are expected to decline by 0.5% Assets Market Value Rate Duration Liabilities Market Value Rate Duration Cash $1,500 Small time $2,000 2.5% 1 deposits Large CDs T-bond $6,000 6.0% 2.5 $8,000 4.0% 2 Comm. Loan $8,000 8.0% 4 Transaction $4,000 2.0% 3 Accounts Total Assets $15,500 Total Liabilities $14,000 2.88 Equity (EVE) $1,500 Total Liabilities $15,500 and Equity