Consider the following balance sheet positions for a financial institution: (LG 23-1)

• 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.

a. Calculate the repricing gap and the impact on net interest income of a 1 percent increase in interest rates for each position.

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

c. What conclusion can you draw about the repricing gap model from these results?AppendixLO1