The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB): U.S. Treasury bills Demand deposits Mortgage-backed securities Loans from other banks C&I loans Discount loans NOW accounts Savings accounts Reserve deposits with Federal Reserve Cash items in the process of collection Municipal bonds Bank building $21 $38 $33 $9 $48 $9 $41 $13 $7 $10 $7 $4 If RNB's assets have an average duration of three years and its liabilities have an average duration of two years, wh is RNB's duration gap? Duration gap=
The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB): U.S. Treasury bills Demand deposits Mortgage-backed securities Loans from other banks C&I loans Discount loans NOW accounts Savings accounts Reserve deposits with Federal Reserve Cash items in the process of collection Municipal bonds Bank building $21 $38 $33 $9 $48 $9 $41 $13 $7 $10 $7 $4 If RNB's assets have an average duration of three years and its liabilities have an average duration of two years, wh is RNB's duration gap? Duration gap=
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Give me proper answer with calculation otherwise i give downvote
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Transcribed Image Text:The following entries (in millions of dollars) are from the balance sheet of Rivendell National Bank (RNB):
U.S. Treasury bills
Demand deposits
Mortgage-backed securities
Loans from other banks
C&I loans
Discount loans
NOW accounts
Savings accounts
Reserve deposits with Federal Reserve
Cash items in the process of collection
Municipal bonds
Bank building
$21
$38
$33
$9
$48
$9
$41
$13
$7
$10
$7
$4
If RNB's assets have an average duration of three years and its liabilities have an average duration of two years, what
is RNB's duration gap?
Duration gap=
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