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6 A financial institution has $100 million of fixed earning assets that mature in 2 years. The assets earn an average of 8%. These are
6
A financial institution has $100 million of fixed earning assets that mature in 2 years. The assets earn an average of 8%. These are funded by 6 month CD liabilities paying 3.5%. If in 6 months interest rates increase 100 basis points How does the NIM change?
Select one:
a. The original NIM is 4.5%
b. The new NIM is 5.5%
c. The NIM increases by 1% & The new NIM is 5.5%
d. All of the above are correct
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