Calculate the predicted change to equity

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A bank has an average asset duration of 2.25 years, the average duration of the liabilities is 1.25 years, and the bank has total assets of $2 billion and $200 million in equity. The bank has an ROE of 9.00%. If all interest rates decrease 50 basis points, how will this impact equity? Calculate the predicted change to equity.

Reference no: EM132047178

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