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(1) The following is an extract of HOOT Bank Ghana Ltd Assets GhCedis Liabilities and Equity GhCedis Investment in T'bills 5000 Savings Deposits 20000

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(1) The following is an extract of HOOT Bank Ghana Ltd Assets GhCedis Liabilities and Equity GhCedis Investment in T'bills 5000 Savings Deposits 20000 Certificate of Deposits 5000 Repurchase Agreement 15000 Variable rate loans 2000 Borrowing from Bank 5000 of Ghana Short term loans 8000 Long term debt 20000 Long-term fixed rate 80000 Current Deposits 10000 loans Building & Equipment 40000 Equity 70000 Additional Information: Interest rate on assets is 9 percent Interest rate on liabilities is 5% Average duration of Assets is 7 years Average duration of liabilities is 5 years Required: a) Calculate the Net Interest Margin of the Bank b) Calculate the interest sensitive cedi Gap position of the bank c) If interest rates should increase by 2 percent on both assets and liabilities, what will happen to the bank's net interest margin? Will it increase, decrease, or remain the same? Compute the cedi change in Net Interest Income as a result of the increase in interest rates by 4 percent d) Find the change in Net worth of the bank as a result of the increase in interest rate by 4 percent.

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