a) what is the cumulative one year repricing gap ( CGAP ) for this bank? show your calculations.

b) suppose interest rates decrease. Assume interest rate changes for rate sensitive assets are equal to interest rate changes for rate senstive liabilities. Will net interest income of Beta Bank increase of decrease because of the change in interest rates? explain your answer

QUESTION 2 Beta Bank has the following rate sensitive assets: - Six-month consumer loans: $40 million Three-month Treasury bills: $20 million Six-month Treasury bills: $10 million Beta Bank has the following rate sensitive liabilities: Three-month certificates of deposits: $60 million Six-month commercial paper. $40 million a) What is the cumulative one year repricing gap (CGAP) for this ba b) Suppose interest rates decrease. Assume interest rate changes Will net interest income of Beta Bank increase or decrease because For the toolbar press ALT+F10 (PC) or ALT+FN+F10 (Mac). B y s Paragraph Arial 14px QUESTION 2 Beta Bank has the following rate sensitive assets: - Six-month consumer loans: $40 million Three-month Treasury bills: $20 million Six-month Treasury bills: $10 million Beta Bank has the following rate sensitive liabilities: Three-month certificates of deposits: $60 million Six-month commercial paper. $40 million a) What is the cumulative one year repricing gap (CGAP) for this ba b) Suppose interest rates decrease. Assume interest rate changes Will net interest income of Beta Bank increase or decrease because For the toolbar press ALT+F10 (PC) or ALT+FN+F10 (Mac). B y s Paragraph Arial 14px