Question: Week 3 : duration and bank value ( slides exercise ) . Part I: Bank ABC has the following 2 bond - like loans: Loan

Week 3: duration and bank value (slides exercise).
Part I:
Bank ABC has the following 2 bond-like loans:
Loan 1: $1m loan fixed for 3 years at 10%
Loan 2: $1m loan fixed for 5 years at 12%
I.a) The market interest rate is now at 5%. The duration of the banks loan portfolio is _____ years. (4 d.p., use spreadsheet to do calculation)

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