Homework Answers
Answer 27:
Gap = Rate Sensitive Assets - Rate Sensitive liabilities = 600 - 500 = 100
Gap = 100
Answer 28:
Net Interest income = 600 * 8% + 250 * 11% - 500 * 4% - 320 * 6% = 36.30
Net Interest income = 36.30
Answer 29:
Net Interest margin = Net Interest Income / Average Earning Assets = 36.30 / (600 + 250) = 4.27%
Net Interest margin = 4.27%
Answer 30:
When interest decreases by 1%:
Net Interest income = 600 * 7% + 250 * 10% - 500 * 3% - 320 * 5% = 36.00
Net Interest margin = 36 / (600 + 250) = 4.24%
Hence:
Net Interest income = 36.00
Net Interest margin = 4.24%
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Bank 5 Liabilities Rate 500 Assets Yield 4% Rate Sensative 600 8% 6% 320 Fixed Rate 250 11% Non Earning 100 150 0%...
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