The answer of given question is d explain why

Reference no: EM131511232

Question: Assume a bank has $200 million of assets with a duration of 2.5, and $190 million of liabilities with a duration of 1.05. If interest rates increase from 5 percent to 6 percent, the net worth of the bank falls by

A) $1 million.

B) $2.4 million.

C) $3.6 million.

D) $4.8 million.

The answer is D. Can you explain why?

Reference no: EM131511232

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