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2. Suppose that Third Bank has $600 million in assets. Of these, $600 million are rate- sensitive assets such as variable-rate and short-term loans. On
2. Suppose that Third Bank has $600 million in assets. Of these, $600 million are rate- sensitive assets such as variable-rate and short-term loans. On the liabilities side, Third Bank has $400 million in rate-sensitive liabilities such as variable-rate CDs and Money Market Deposit Accounts. a. What is the Gap for Third Bank? b. By how much would Third Bank's profits change if interest rates increase by 5%
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