Question: The following financial statement is for the current year: Second National Bank Assets Duration Liabilities Duration Reserves 5,000,000 0.00 Checkable Deposits 15,000,000 2.00 Securities Money
- The following financial statement is for the current year:
| Second National Bank | |||||
| Assets | Duration | Liabilities | Duration | ||
| Reserves | 5,000,000 | 0.00 | Checkable Deposits | 15,000,000 | 2.00 |
| Securities |
|
| Money Market Deposits | 5,000,000 | 0.10 |
| > 1 Year | 5,000,000 | 0.40 | Savings Accounts | 15,000,000 | 1.00 |
| 1 to 2 Years | 5,000,000 | 1.60 | CDs |
|
|
| < 2 years | 10,000,000 | 7.00 | Variables-rate | 10,000,000 | 0.50 |
| Residential Mortgages |
| < 1 Year | 15,000,000 | 0.20 | |
| Variables-rate | 10,000,000 | 0.50 | 1 to 2 Years | 5,000,000 | 1.20 |
| Fixed-rate | 10,000,000 | 6.00 | < 2 years | 5,000,000 | 2.70 |
| Commercial Loans |
|
| Interbank Loans | 5,000,000 | 0.00 |
| < 1 Year | 15,000,000 | 0.70 | Borrowings |
|
|
| 1 to 2 Years | 10,000,000 | 1.40 | < 1 Year | 10,000,000 | 0.30 |
| > 2 years | 25,000,000 | 4.00 | 1 to 2 Years | 5,000,000 | 1.30 |
| Buildings, etc. | 5,000,000 | 0.00 | > 2 years | 5,000,000 | 3.10 |
|
|
|
| Bank Capital | 5,000,000 |
|
|
|
|
|
|
|
|
| Total | $100,000,000 |
| Total | $100,000,000 |
|
Required: Calculate the duration gap for the bank.
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