FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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M4
If a bank's initial GAP is $100 million after which it
doubles its rate-sensitive assets and liabilities, what
is the expected change in net interest income if
rates increase by 1 percentage points (Assume a
parallel shift in the yield curve)?
A)Net interest income will fall by $1 million
B)Net interest income will fall by $2 million
C)Net interest income will increase by $1 million
d)Net interest income will increase by $2 million
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Transcribed Image Text:If a bank's initial GAP is $100 million after which it doubles its rate-sensitive assets and liabilities, what is the expected change in net interest income if rates increase by 1 percentage points (Assume a parallel shift in the yield curve)? A)Net interest income will fall by $1 million B)Net interest income will fall by $2 million C)Net interest income will increase by $1 million d)Net interest income will increase by $2 million
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