![[ii] The Monetary Policy Committee at the Bank of England has raised interest rates by 0.5%. To determine interest rate risk,](http://img.homeworklib.com/questions/1ba59f70-7925-11ea-9385-f9ddb77e4dae.png?x-oss-process=image/resize,w_560)
Homework Answers
According to the given question,
Rate sensitive Assets (RSA) = 500
Rate sensitive liabilities (RSL) = 600
Increase in interest rate = 0.5%
Hence, Interest Rate Risk = (RSA - RSL) x Change in rate
= (500 - 600) x 0.5% = (0.5) %
This states that, increase in the interest rate will cause a decline in the net interest income.
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Finishing Project so i need this ASAP please ( IN 1-2-3 HOURS
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