Consider the following income statement for WatchoverU Savings Inc. (in millions): (LG 20-1) Assets Liabilities Floating-rate mortgages
Question:
Consider the following income statement for WatchoverU Savings Inc. (in millions): (LG 20-1)
Assets Liabilities Floating-rate mortgages
(currently 10% annually) $ 50 NOW accounts
(currently 6%
annually)
$ 70 30-year fixed-rate loans (currently 7% annually) 50 Time deposits
(currently 6%
annually) 20 Equity 10 Total $100 $100
a. What is WatchoverU’s expected net interest income at year-end?
b. What will be the net interest income at year-end if interest rates rise by 2 percent?
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Related Book For 
ISE Financial Markets And Institutions
ISBN: 9781265561437
8th International Edition
Authors: Anthony Saunders, Marcia Cornett, Otgo Erhemjamts
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