1.A bank invested $50 million in a two-year asset paying 10 per cent interest per annum and...

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1.A bank invested $50 million in a two-year asset paying 10 per cent interest per annum and simultaneously issued a $50 million, one-year liability paying 8 per cent interest per annum. What will be the impact on the bank’s net interest income if at the end of the first year all interest rates have increased by 1 per cent (100 basis points)? LO 4.1

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