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Question
The Raymond Burr National Bank has $1,000 in assets with an average duration of 5 years. This bank has $800 in liabilities with an average duration of 6.25 years. Market interest rates start at 6 percent and fall by 1 percent. What is the change in net worth of this bank?
A. $11.29
B. -$11.29
C. $0
D. -$22.22
E. $22.22
Answer
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