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What actions could take to reduce the bank

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Problem 1: Suppose you are the manager of a bank whose $120 billion of assets have an average duration of six years and whose $90 billion of liabilities have an average duration of eight years. Conduct a duration analysis for the bank, and show what will happen to the net worth of the bank if interest rates rise by 50 basis points percentage points from 7% to 7.50%. What actions could you take to reduce the bank's interest-rate risk?

Reference no: EM132755046

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