Loans are 4 years maturities paying 8% annual coupons and selling at par.
>(FV=PV) Calculate the duration of cash and loans
If the entire yield curve shifted upwards by 100 basis points, what is the impact on the
FI's market value of equity? Duration of cash = 0 (why?)

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Balance Sheet ($'000) Balance Sheet Item Cash ASSET Duration (years) Amount ($) ? (Cash duration is always 50 0) Commercial Bills - ASSET 0.3 50 T-notes- ASSET 2.5 30 Deposits -LIABILITY 1 2200 Interbank deposits - 0.01 150 (ASSET) Borrowed funds - 2 500 LIABILITY Equity - EQUITY Loans - ASSET - 80 ? 2500 Balance Sheet ($'000) Balance Sheet Item Cash ASSET Duration (years) Amount ($) ? (Cash duration is always 50 0) Commercial Bills - ASSET 0.3 50 T-notes- ASSET 2.5 30 Deposits -LIABILITY 1 2200 Interbank deposits - 0.01 150 (ASSET) Borrowed funds - 2 500 LIABILITY Equity - EQUITY Loans - ASSET - 80 ? 2500