11. Consider the following balance sheet for WatchoverU Savings, Inc. (in millions): Liabilities and Equity 1-year time deposits (currently 6% annually) 3-year time deposits (currently 7% annually) Equity Assets Floating-rate mortgages (currently 10% annually) $50 30-year fixed-rate loans (currently 7% annually) $50 Total assets $100 Total liabilities & equity $70 $20 $10 $100 a) What is WatchoverU's expected net interest income at year-end? b) What will net interest income be at year-end if interest rates rise by 2 percent? c) Using the cumulative repricing gap model, what is the expected net interest income for a 2 percent increase in interest rates?

11. Consider the following balance sheet for WatchoverU Savings, Inc. (in millions): Total assets $100 Total liabilities \& equity $100 a) What is WatchoverU's expected net interest income at year-end? b) What will net interest income be at year-end if interest rates rise by 2 percent? c) Using the cumulative repricing gap model, what is the expected net interest income for a 2 percent increase in interest rates