Calculate the percentage decrease in first national? bank

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Suppose First National Bank holds ?$100 million in assets with an average duration of 5 ?years, and it holds ?$85 million in liabilities with an average duration of 2 years. Further suppose there is a 2?-percentage-point increase in interest rates. Calculate the percentage decrease in First National? Bank's net worth relative to the total original asset value.

A 2?-percentage-point increase in interest rates decreases First National? Bank's net worth by nothing?% of the total original asset value. ?(Round your response to two decimal? places.)

Reference no: EM132167954

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