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ange in net inter percentage poi

ange in net inter percentage poi

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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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