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National B OENOLOGIULID Liabilities and Equity Amount (million $) Cost Rate Core deposits 4.00% Borrowings 10 Equity 10 Total
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Answer #1

Ans.

Liquidate securities totaling 10,000,000 /0.97 = 10,309,278,

Losing interest income = 5.5% x 10,309,278 = $ 567,010, and

Gain in interest expense of 4% x 10,000,000 core deposits = 400,000

So net total loss is $ 400,000 - $ 567,010 = -$167,010

So correct ans is D) - $ 167,010

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