1.Consider the following balance sheet positions for a financial institution:

Rate-sensitive assets = $200 million. Rate-sensitive liabilities = $100 million Rate-sensitive assets = $100 million. Rate-sensitive liabilities = $150 million Rate-sensitive assets = $150 million. Rate-sensitive liabilities = $140 million Calculate the repricing gap and the impact on net interest income of a 1 per cent increase in interest rates for each position.

Calculate the impact on net interest income on each of the above situations assuming a 1 per cent decrease in interest rates.

What conclusion can you draw about the repricing model from these results? LO 5.3, 5.4