Question: Based on a company s balance sheet, the asset includes: A 1 with value of $ 3 million and duration of 2 years A 2

Based on a companys balance sheet, the asset includes:
A1 with value of $3 million and duration of 2years
A2 with value of $2 million and duration of 6 years
A3 with value of $1 million and duration of 8 years
The liability includes:
L1 with value of $4 million and duration of 20 years
L2 with value of $2 million and duration of 30 years
What is the liability value change in million dollars if interest rate decreases by 1 basis point?
$ 14.65
$ 0.03
$ 10.31
$ 6.45
$ 23.33
$ 0.014
$ 4.33

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!