The ________ rate represents the difference between the spot and forward price

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 following figures are for the banking system. Deposits at the central bank = 400 U.S. Government Securities = 600 Transactions Deposits = 1,700 Loans = 800 Stockholder's Equity = 70 Other Assets = 450 Other Liabilities = 380 Borrowing from the Federal Reserve = 250 Cash in the Vault = 150 The reserve ratio on transactions deposits = 10% Currency in circulation = 10 The monetary base equals:

a. 80 b. 1,700 c.A multiple of 80 d. A multiple of 250 e. 560