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Bank of Matheson's current repricing gap is illustrated in the following diagram: ANII ANII = CGAP X (AI) (i) Is Bank of Matheson asset-sensitive or
Bank of Matheson's current repricing gap is illustrated in the following diagram: ANII ANII = CGAP X (AI) (i) Is Bank of Matheson asset-sensitive or liability-sensitive? Explain your answer. (3 marks) (ii) Bank of Matheson anticipates rising interest rates and bank managers are adopting an active (aggressive) risk management approach. What specific balance sheet adjustments will be appropriate for this bank? (4 marks) Bank of Matheson's current repricing gap is illustrated in the following diagram: ANII ANII = CGAP X (AI) (i) Is Bank of Matheson asset-sensitive or liability-sensitive? Explain your answer. (3 marks) (ii) Bank of Matheson anticipates rising interest rates and bank managers are adopting an active (aggressive) risk management approach. What specific balance sheet adjustments will be appropriate for this bank? (4 marks)
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