1. A bank manager is worried because the income gap currently equals -$35 million and interest rates are expected to inc
Posted: Mon May 02, 2022 9:37 am
1. A bank manager is worried because the income gap currently
equals -$35 million and interest rates are expected to increase by
1.5%. Determine the amount of rate-sensitive assets if
rate-sensitive liabilities are $467 million. Calculate the change
in bank income if interest rates increase by 1.5%
2. Determine the income gap of a bank with the following
assets: reserves ($6 million), short term securities ($8 million),
commercial loans maturing in less than 1 year ($20 million),
commercial loans maturing in more than 5 years ($30 million); and
the following liabilities: federal funds ($9 million), short term
borrowings ($10 million), long term borrowings ($7 million), and
CDs maturing in more than 2 years ($4 million).
equals -$35 million and interest rates are expected to increase by
1.5%. Determine the amount of rate-sensitive assets if
rate-sensitive liabilities are $467 million. Calculate the change
in bank income if interest rates increase by 1.5%
2. Determine the income gap of a bank with the following
assets: reserves ($6 million), short term securities ($8 million),
commercial loans maturing in less than 1 year ($20 million),
commercial loans maturing in more than 5 years ($30 million); and
the following liabilities: federal funds ($9 million), short term
borrowings ($10 million), long term borrowings ($7 million), and
CDs maturing in more than 2 years ($4 million).