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# 1 . Use the following information about a hypothetical government security dealer named M . P . Jorgan. Market yields are in parenthesis, and
# Use the following information about a hypothetical government security dealer named M P Jorgan.
Market yields are in parenthesis, and amounts are in millions.
a What is the repricing gap if the planning period is days? months? years? Recall that cash is a
noninterestearning asset.
b What is the impact over the next days on net interest income if interest rates increase basis
points? Decrease basis points?
c The following oneyear runoffs are expected: $ million for twoyear business loans and $
million for eightyear mortgage loans. What is the oneyear repricing gap?
d If runoffs are considered, what is the effect on net interest income at yearend if interest rates
increase basis points? Decrease basis points?
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