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Artemon [7]
3 years ago
11

A bank has $50 million in assets, $47 million in liabilities and $3 million in shareholders' equity. If the duration of its liab

ilities are 1.3 and the bank wants to immunize its net worth against interest rate risk and thus set the duration of equity equal to zero, it should select assets with an average duration of _________.
Business
1 answer:
Alisiya [41]3 years ago
5 0

Answer: 1.222

Explanation:

The Average duration can be derived from the formula:

Assets * Average Duration = Liabilities * Duration of Liabilities

Average Duration = (Liabilities * Duration of Liabilities) / Assets

= (47,000,000 * 1.3) / 50,000,000

= 61,100,000 / 50,000,000

= 1.222

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4vir4ik [10]

Answer:

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6 0
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How did the role of the onondaga people differ from the roles of the other four trives of iroquois nation?
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4 0
2 years ago
Shyla conducted an experiment. she went to the student union and asked people if they would like to be subjects in her study. sh
Assoli18 [71]
No!
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