Use the following information about a hypothetical govern- ment security dealer named J.P. Groman. (Market yields are

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Use the following information about a hypothetical govern- ment security dealer named J.P. Groman. (Market yields are in parentheses; amounts are in millions.) (LG 22-1) Assets Liabilities and Equity Cash $ 10 Overnight repos $170 1-month T-bills (7.05%) 75 Subordinated debt 3-month T-bills (7.25%) 75 7-year fixed (8.55%) 150 2-year T-notes (7.50%) 50 8-year T-notes (8.96%) 100 5-year munis (floating rate) (8.20% reset every six months) 25 Equity Total $335 Total 15 $335

a. What is the repricing or funding gap if the planning period is 30 days? 91 days? 2 years? (Recall that cash is a noninterest-earning asset.)

b. What is the impact over the next 30 days on net interest income if all interest rates rise by 50 basis points?

c. The following one-year runoffs are expected: $10 million for two-year T-notes, $20 million for the eight-year T-notes. What is the one-year repricing gap?

d. If runoffs are considered, what is the effect on net inter- est income at year-end if interest rates rise by 50 basis points?

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