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2.Consider the following balance sheet positions for a financial institution: (8 points) a. Rate-sensitive assets =$100 million; Rate-sensitive liabilities =$200 million b. Rate-sensitive assets =$180

image text in transcribed 2.Consider the following balance sheet positions for a financial institution: (8 points) a. Rate-sensitive assets =$100 million; Rate-sensitive liabilities =$200 million b. Rate-sensitive assets =$180 million; Rate-sensitive liabilities =$100 million c. Rate-sensitive assets =$120 million; Rate-sensitive liabilities =$160 million i) Calculate the repricing gap and the impact on net interest income of a 1% increase in interest rates for each position (i.e. what is the change in net interest income?) ii) Calculate the impact on net interest income on each of the above situations assuming a 1% decrease in interest rates iii) What conclusion can you draw about the repricing gap model from these results? iv) If interest rate for RSA decrease by 1% and interest rate for RSL decrease by 2%, what is the change in net interest income for each position

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