Suppose that you are the manager of a bank that has 15 million of fixed-rate assets, 30

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Suppose that you are the manager of a bank that has

€15 million of fixed-rate assets, €30 million of rate-sensitive assets, €25 million of fixed-rate liabilities and €20 million of rate-sensitive liabilities. Conduct a gap analysis for the bank, and show what will happen to bank profits if interest rates rise by 5 percentage points. What actions could you take to reduce the bank’s interest-rate risk?

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The Economics Of Money, Banking & Financial Markets

ISBN: 126161

1st Edition

Authors: Massimo Giuliodori, Frederic S. Mishkin Kent Matthews

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