assets is four years and the average duration of its liabilities is three years. Assume the bank has the following balance sheet. Assets Liabilities Checkable deposits $100 million Bank 50 million capital Total Assets $150 million and Capital If interest rates are expected to increase by 5 percentage points, say from 2% to 7%, what will be the effect on the net worth of Garden bank? Total Liabs $150 million

assets is four years and the average duration of its liabilities is three years. Assume the bank has the following balance sheet. Assets Liabilities Checkable deposits $100 million Bank 50 million capital Total Assets $150 million and Capital If interest rates are expected to increase by 5 percentage points, say from 2% to 7%, what will be the effect on the net worth of Garden bank? Total Liabs $150 million

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter17: Financial Markets

Section: Chapter Questions

Problem 3SCQ: Calculate the equity each of these people has in his or her home: Fred just bought a house for...

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