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1 If an FI funds $60 million one-year assets paying 11% interest per annum with $60 million three-year liabilities paying 6% interest per annum.
1 If an FI funds $60 million one-year assets paying 11% interest per annum with $60 million three-year liabilities paying 6% interest per annum. a) What will be the bank's net interest income at years 1 and 2, if at the end of the first year all interest rates have decreased by 0.7 percent (70 basis points)? b) What type of interest rate risk is this: refinancing or reinvestment?
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
