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Question
From a regulatory perspective, what is the impact on book value capital of a 25 basis point decrease in interest rates if the FI is holding a 20-year, fixed-rate, 11 percent annual coupon $100,000 par value bond?
A. A decrease of $250.
B. An increase of $250.
C. An increase of $2,023.
D. A decrease of $1,959.
E. No impact on capital since the book value is unchanged.
Answer
This answer is hidden. It contains 1 characters.
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