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A bank has the following balance sheet: Assets Return Million $ Liabilities and Equity Cost Millions $ Cash 0.00 % $ 35 Fixed-rate deposits 3.50

A bank has the following balance sheet:

Assets Return Million $ Liabilities and Equity Cost Millions $
Cash 0.00 % $ 35 Fixed-rate deposits 3.50 % $ 240

Investments

(< 1 year)

4.00 % $ 200 Rate-sensitive deposits 2.00 % $ 260

Short-term loans

(< 1 year)

6.00 % $ 225 Fed fund borrowings 2.50 % $ 25

Long-term fixed-rate loans

(maturity

> 1 year)

6.75 % $ 250

Long-term borrowings at fixed rate

(maturity

> 1 year)

5.50 % $ 119
Equity $ 66
Total $ 710 Total $ 710

What will be the change in net interest income at year-end if interest rates rise by 2 percent using the Funding Gap Method?

Enter answer as decimal 0.00

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