Premises 6.25

$337.50 $337.50

a. Calculate the value of MMC’s rate-sensitive assets, rate-sensitive liabilities, and repricing gap over the next year.

b. Calculate the expected change in the net interest income for the bank if interest rates rise by 1 percent on both RSAs and RSLs. If interest rates fall by 1 percent on both RSAs and RSLs.

c. Calculate the expected change in the net interest income for the bank if interest rates rise by 1.2 percent on RSAs and by 1 percent on RSLs. If interest rates fall by 1.2 percent on RSAs and by 1 percent on RSLs.